• China controls 70% of rare earth mining and 90% of magnet production, recently expanding export licensing to 12 restricted materials, including dysprosium and terbium, critical for EVs and defense.
• The U.S. has committed over $439 million since 2020 toward rare-earth supply chain independence, aiming to eliminate Chinese dependence in defense applications by 2027.
• Global rare earth demand is projected to triple by 2030, driven by electrification, but mine-to-magnet independence faces capital-intensive hurdles in permitting, processing, and production scaling.

An equity research note released February 20 by investment bank William Blair (opens in a new tab) argues that rare earth elements have moved from an industrial niche to a geopolitical flashpoint. The report highlights a stark reality: China controls roughly 70% of global rare earth mining, 90% of separation capacity, and more than 90% of magnet production. Beijing has now expanded export licensing requirements to five additional medium- and heavy-rare earth materials — bringing the total restricted category to 12. Among them: dysprosium and terbium, critical for high-temperature permanent magnets used in EV motors, robotics, and advanced defense systems.

William Blair Headquarters, Chicago IL

China Tightens. Washington Responds.

According to the report, the U.S. response is accelerating.

Since 2020, the U.S. Department of Defense has committed more than $439 million to address bottlenecks in rare earth extraction, processing, and magnet production. Programs include:

• Direct grants and equity-style project support
• Defense Production Act funding
• Recycling initiatives targeting end-of-life magnets and coal byproducts

The strategic objective: eliminate China's rare-earth dependency in defense applications by 2027.

Demand Is the Multiplier

William Blair projects global rare earth demand could triple by 2030, driven by electrification and energy transition mandates. This creates a dual dynamic: structural demand growth colliding with constrained heavy-rare-earth supply.

Investment implications cited include:

• Domestic and allied miners in the U.S., Australia, and Canada
• Heavy rare earth separation technology providers
• Financial institutions backing national security–linked supply chains

The Execution Risk

The note also cautions that mine-to-magnet independence is capital-intensive and time-consuming. Permitting, metallurgy, solvent extraction scaling, and magnet alloy production remain structural hurdles.

Rare earths are no longer a commodity story alone. They are industrial policy, defense strategy, and capital markets converging.

For investors, the question is no longer whether supply chains will realign — but which platforms will actually execute.