Highlights

• Intelligence services are targeting rare earth processing and magnet manufacturing as strategic infrastructure, treating supply chain chokepoints as sites for denial, disruption, and covert action rather than normal market competition.
• China's 91% refining dominance and 94% magnet production share enables weaponized interdependence through export controls, as demonstrated by January 2026 restrictions on Japan, making processing capacity the critical bottleneck.
• Governments and investors must plan for security risks—including astroturfed environmental activism, licensing friction, and geopolitical sabotage—as normal variables in project timelines, not market anomalies.

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In ORF Occasional Paper (opens in a new tab) No. 514 (January 2026), Samir Saran (President, Observer Research Foundation) and Archishman Ray Goswami (ORF; Oxford DPhil candidate) argue that the intelligence battlefield is expanding well beyond spies and satellites into the hard plumbing of critical mineral supply chains—especially rare earth elements (REEs). Their central claim is simple: as demand rises and supply chains fracture, nations will treat REE mining, processing, and magnets as strategic infrastructure that must be protected, monitored, and—at times—disrupted.

Background

This is a strategy/policy analysis, not a technical mining study. The authors synthesize recent geopolitical developments and security trends to explain how four forces are reshaping intelligence: digital “geotechnography,” the global race for REEs, the evolution of HUMINT amid ubiquitous technical surveillance, and the growing role of private-sector intelligence and Big Tech.

Key findings for the rare earth supply chain

Rare earths are becoming a driver of state competition—and a mission for intelligence services. The authors describe REEs as “an increasingly central feature” of the security landscape and argue that competition over them will shape international politics in coming years.

“Weaponized interdependence” means supply chains can be attacked at choke points. Because supply chains stretch across jurisdictions, pressure at a single node (licenses, shipping, processing capacity, intermediates) can translate into geopolitical leverage. The authors explicitly frame REEs as emblematic of this vulnerability.

Expect more “denial and disruption” behavior around REEs.
The paper warns that sabotage/denial tactics—familiar from Cold War competition—are likely to spill into the REE domain, where preventing a competitor from scaling supply may be strategically valuable.

Conflict zones can become rare earth pressure valves.
The authors highlight Myanmar as a high-risk example: armed actors can leverage control over dysprosium/terbium-bearing areas to shape flows and relationships—especially with neighboring China.

Environmental narratives can be weaponized.
One of the paper’s more provocative warnings is that “local activism” and environmental concerns around REE mining can become targets for politicization—potentially including “astroturfed activism” and information warfare to obstruct competitors’ projects.

The paper’s anchor point: China’s near-monopoly and export restriction playbook

While the paper is broad, its REE urgency crystallizes in the “Implications for India” section: the authors cite the “near monopoly of China” in the sector and the export-restrictions strategy that can trigger a scramble for alternatives.

Independent, numbers-driven supply-chain analysis underscores why “processing dominance” matters more than ore: the IEA reports China’s share at roughly 91% of global separation and refining, and about 94% of sintered permanent magnet production—a downstream concentration that turns industrial supply into strategic leverage.

And this isn’t abstract. In January 2026, Reuters reported that China began limiting exports of rare earths and magnets to Japanese companies amid a widening dispute, highlighting how quickly administrative licensing can become geopolitical friction.

Implications for governments, industry, and investors

• Build strategy around processing, not just mining. The real bottleneck—and leverage point—is separation/refining and magnet manufacturing.
• Plan for “security risk” in project timelines. Permitting, activism, disinformation, licensing rules, and cross-border chokepoints increasingly behave like national-security variables, not normal market noise.
• Assume more export controls and compliance friction. The IEA documents escalating controls and how licensing delays/denials can ripple across autos, energy tech, defense, aerospace, semiconductors, and data centres.

Limitations and points of controversy

• Not an empirical dataset. The paper maps plausible mechanisms and incentives rather than proving causal claims with new data.
• Hard-to-verify domains. Predictions about covert action, proxy dynamics, and “astroturfing” are inherently difficult to substantiate publicly; treat them as risk scenarios rather than settled facts.
• India-forward framing. Its policy recommendations and urgency are anchored in India’s strategic context, though the supply-chain logic generalizes.

Bottom line

ORF’s message is both a warning and a catalyst: rare earths—especially processing and magnets—are no longer “just” industrial inputs; they are strategic terrain. As China’s dominance and export-control leverage harden, countries that move fastest on diversification, processing capacity, and supply-chain intelligence will be the ones that keep their clean-tech and defense futures in their own hands.

The Source

Note ORF is an independent global think tank headquartered in New Delhi, India, with additional centres in Mumbai, Chennai, and Kolkata, focusing on public policy, geopolitics, economics, and technology. Founded in the early 1990s with backing from the Dhirubhai Ambani family and historically funded largely by Reliance Industries, ORF states that it operates independently, though reports indicate Reliance provided up to 95% of its budget until 2009 and continues to account for a substantial share (estimated around 65%), alongside growing government and foreign foundation support.

ORF has gained prominence in Indian and global policy circles, notably through initiatives such as the Raisina Dialogue, but it has also faced scrutiny from independent media over potential conflicts of interest—particularly concerning its leadership under Samir Saran, a former Reliance executive, and its close proximity to senior government figures, including through ORF America and diplomatic engagements. Despite these criticisms, ORF remains highly influential and internationally recognized, ranking 20th globally and 2nd in Asia (China, India, Japan, South Korea) in the University of Pennsylvania’s 2020 Global Go To Think Tank Index.

Citations

• Samir Saran & Archishman Ray Goswami, “Swords and Shields: Navigating the Modern Intelligence Landscape,” ORF Occasional Paper No. 514 (Jan 2026).
• IEA (Oct 23, 2025), “With new export controls on critical minerals, supply concentration risks become reality” (processing/refining and magnet concentration; export controls escalation; 58,000 tonnes magnet exports in 2024).
• Reuters (Jan 7–8, 2026) reporting China’s rare earth/magnet export curbs to Japan amid dual-use controls dispute.

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