Why Is China So Important to Rare Earths Mining?

Why It Matters

China’s control of rare‑earths threatens supply security for critical technologies, prompting the U.S. and allies to diversify and safeguard their strategic industries.

Key Takeaways

• China controls roughly 69% of global rare‑earth mining.
• Over 90% of rare‑earth refining and magnet production lies in China.
• Beijing has used export bans to pressure Western economies.
• Price manipulation keeps new competitors out of the rare‑earth market.
• U.S. and allies are pursuing “friend‑shoring” to secure supply chains.

Summary

The video explains why China has become the linchpin of the rare‑earth supply chain, a sector once dominated by the United States until the early 1990s. Today China extracts about 69% of the world’s rare‑earth ores and commands more than 90% of the downstream refining and magnet manufacturing, giving it decisive leverage over a critical technology input. Key data points illustrate Beijing’s strategic use of that dominance. In 2023 China imposed export restrictions twice—in April and October—targeting Western buyers, including the United States. It has also driven prices down to deter new entrants and, historically, cut off shipments to Japan in 2010, demonstrating a willingness to weaponize supply. These actions are underscored by concrete examples: the dual export bans, price‑suppression tactics, and the 2010 Japanese embargo. Such moves signal that rare‑earths are not merely a commercial commodity but a geopolitical lever. The implications are clear: rare‑earths are now a national‑security concern for the U.S. and its allies. Policymakers are accelerating “friend‑shoring” initiatives, investing in domestic mining, and seeking alternative sources to reduce dependence on China’s near‑monopoly.

Original Description

Today, the rare earth metals market sits at roughly $14 billion. It's on track to more than double by the mid 2030s. Sprott Asset Management Head of ETFs Steve Schoffstall discusses what rare earths elements are and why they're so important to today's economy.

In this episode of Metals in Motion, Thalia Hayden @etfguide chats with Steve Schoffstall, Managing Partner, Sprott Inc. and Head of ETFs at Sprott Asset Management about trends in rare earths metals markets, and how investors can take advantage of the trends.

#rareearthminerals #mining #etf

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