Highlights

• China controls 60-70% of global rare earth mining and 80-90% of processing capacity.
• Major conglomerates dominate the entire rare earth value chain in China.
• Over 10,000 rare earth-related patent filings between 2012-2022 demonstrate China's technological innovation and strategic positioning.
• Challenges such as resource depletion and environmental pressures suggest potential supply chain vulnerabilities despite China's strong rare earth dominance.

---

A recently published peer-reviewed study led by Aleksandr Kirsanov (opens in a new tab) of the Institute of Non-Ferrous Metals, Siberian Federal University, Krasnoyarsk, Russia (opens in a new tab) examines China’s position in the rare earth supply chain. Published in New Countryside (Vol. 4, Issue 2, July 2025 (opens in a new tab)), the article—“Assessment of the Research and Production Bridgehead of the Rare Earth Industry of the People’s Republic of China”—offers a deep dive into China’s production structure, corporate consolidation, and innovation ecosystem.

Key Findings

The authors confirm what industry observers already know: China is the undisputed global leader in rare earths, controlling roughly 60–70% of global mining and nearly 80–90% of processing capacity. Major conglomerates such as Baogang Group, JL Mag, and China Minmetals dominate the full value chain, from mining to high-value magnet production.

The study highlights China’s aggressive patent activity—over 10,000 rare earth–related filings between 2012 and 2022—showing a rapid innovation drive in extraction, chemical separation, and downstream applications. This positions Beijing not just as a resource holder but as a technological powerhouse.

China’s vertically integrated “closed-loop” model, where tailings and by-products are repurposed within affiliated companies, helps minimize waste and maximize efficiency. At the same time, government policy and subsidies underpin the sector’s resilience.

Implications

For global stakeholders, the implications are clear: China’s dominance is entrenched but evolving. While the West accelerates efforts to diversify supply—through projects in Australia, North America, and Africa—the scale and sophistication of Chinese industry present a formidable challenge. The study suggests that if China further tightens exports (as it did in 2010 against Japan and in 2019 during the U.S. trade war), global industries—especially EVs, renewables, and defense—remain highly exposed.

For investors, the findings underline why ex-China projects attract increasing attention and capital: every turn of the regulatory screw in Beijing strengthens the case for supply chain diversification.

Limitations of the Study

While comprehensive, the paper carries limitations. First, it leans heavily on patent counts and corporate reports—measures that may not fully reflect actual industrial competitiveness or quality of innovation. Second, the Russian authors frame China’s dominance in terms that may reflect geopolitical alignment, emphasizing strengths while underplaying challenges such as resource depletion at Baotou, rising environmental costs, and the growing burden of illegal mining.

Moreover, the study touches only briefly on the bottlenecks and risks that Western companies face when attempting to break into midstream and downstream segments—areas critical for investors to understand.

Conclusion

This research confirms China’s rare earth “bridgehead” remains firmly in place, secured by reserves, infrastructure, and innovation. Yet it also reveals cracks: declining ore grades, environmental pressures, and an innovation network that remains fragmented compared to Japan’s or the U.S.’s more diversified approaches. For the global industry, the message is clear: China is still the anchor, but not invulnerable. Strategic investment in diversified, ex-China supply chains is both urgent and unavoidable.

Citation: Kirsanov, A., Pervykh, S., Zdonis, A. (2025). Assessment of the Research and Production Bridgehead of the Rare Earth Industry of the People’s Republic of China. New Countryside, 4(2): 54–71. DOI: https://doi.org/10.55121/nc.v4i2.460 (opens in a new tab)

© Rare Earth Exchanges™. Accelerating Transparency, Accuracy, and Insight Across the Rare Earth & Critical Minerals Supply Chain