Highlights

• China maintains overwhelming control of rare earth production, with 69% market share in 2024.
• China is projected to have 52% mining and 76% refining capacity by 2035.
• Western countries are attempting to diversify mineral supply chains through public investment and international cooperation.
• Progress in diversifying mineral supply chains remains limited.
• Critical rare earth elements are essential for electric vehicles, wind turbines, and advanced electronics.
• China's market dominance in rare earths is strategically significant.

Despite growing Western efforts to diversify critical mineral supply chains, China will retain overwhelming control of the global rare earths market for at least another decade, according to a new analysis by the International Energy Agency (IEA).

As of 2024, China accounts for roughly 69% of global rare earths production. By 2035, that dominance is projected to decline only slightly, holding 52% of mining and 76% of global refining capacity. These figures reflect the lasting impact of decades-long industrial policy, extensive technical expertise, and an established workforce in the rare earth processing industry. Rare earth elements such as neodymium, praseodymium, terbium, and dysprosium are essential for magnets used in electric vehicles, wind turbines, and advanced electronics.

The G7’s June 17 joint declaration called for action against market manipulation and support for onshoring and diversifying mineral supply chains. But the IEA warns that market forces alone are insufficient. Targeted public investment, export credit support, and international cooperation are needed to reduce dependency.

Although companies like Australia’s Lynas have made breakthroughs—becoming the only non-China producer of separated heavy rare earths—Western capacity remains a fraction of China’s. Some progress is expected in 2026, with the introduction of new facilities in the U.S. and Australia, as well as new supply projects in Brazil, Malawi, and South Africa.

China’s grip tightened in April when it imposed export restrictions in response to the Trump administration's tariffs. A June agreement in London reportedly softened some of those controls, but restrictions on defense-grade magnet exports remain.

Analysts say the West is late—but not too late—to act. Without rapid, large-scale investment, China’s rare earth monopoly will endure.

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