Rare Earth Elements Review Finds China Controls 92% of Refining as Clean-Energy Demand Accelerates

Highlights

• China accounted for 69.5% of 2025 mine production, 92% of 2024 refined output, and 94% of permanent-magnet production.
• Researchers screened 785 records using the PRISMA framework; only 1.4% of REE literature addressed supply chains and geopolitics.
• Authors project China retaining roughly 75% of global refining capacity even by 2040, underscoring the midstream bottleneck.
• REE processing can generate hazardous and radioactive waste, complicating the clean-energy narrative for EVs and wind turbines.
• Supply diversification is identified as the most effective short- to medium-term response over recycling or substitution alone.

The energy transition carries a rare earth paradox: technologies intended to strengthen energy security remain dependent on one extraordinarily concentrated industrial supply chain. Victor Osvaldo Vega-Muratalla of the Universidad Michoacana de San Nicolás de Hidalgo, with Luis Fernando Lira-Barragán, César Ramírez-Márquez, José María Ponce-Ortega and Texas A&M University’s Mahmoud M. El-Halwagi, systematically reviewed (opens in a new tab) the rare earth element (REE) literature and found China accounted for 69.5% of 2025 mine production, about 92% of 2024 refined output, and 94% of 2024 permanent-magnet production. Their conclusion: diversification, recycling, and cleaner processing must advance together if electric vehicles, wind turbines and other technologies are to scale without deepening strategic dependency.

REEx Insight: The Midstream Is the Moat

The review reinforces a central REEx thesis: the West does not primarily have a geology problem—it has an industrialization problem. Rare earth deposits occur across the world, but China’s competitive advantage compounds downstream through separation, refining and magnet manufacturing. Even by 2040, the authors project China retaining roughly 75% of global refining capacity.

New mines therefore solve only part of the problem. The West needs commercially competitive separation plants, metals and alloys capacity, qualified magnet factories—and customers willing to support them.

Methods, Findings and the Green Paradox

Using the PRISMA systematic-review framework, researchers screened 785 records and ultimately included 205 publications from 2015–2026. Remarkably, the authors report that 87% of the literature examined resource availability, production and recycling, while only 1.4% focused on supply chains and geopolitics. The environmental findings complicate the clean-energy narrative. Depending on the mineral and processing route, REE production can require substantial energy, water and chemical inputs while generating hazardous—and in some deposits radioactive—waste. Recycling offers relief, but cost, collection, infrastructure, chemical intensity and scalability remain obstacles.

Limitations and What Comes Next

This is a systematic review, not new experimental research; the authors generated no new primary data, meaning conclusions depend on the quality, definitions and assumptions of underlying studies and datasets.

The strategic message is harder to ignore: mine diversification without midstream diversification leaves the bottleneck intact. Recycling and substitution matter, but the authors themselves conclude supply diversification is the most effective short- to medium-term response. The race is therefore not simply for ore—it is for the capability to turn ore into separated oxides, metals, alloys and ultimately magnets.

Citation: Vega-Muratalla, V.O., Lira-Barragán, L.F., Ramírez-Márquez, C., El-Halwagi, M.M. & Ponce-Ortega, J.M. Rare Earth Elements in the Energy Transition: A Review of the Demand-Sustainability-Risk Nexus and Future Perspectives. Eng 2026, 7, 211. Published May 1, 2026. DOI: 10.3390/eng7050211.