Highlights
- Myanmar’s conflict and China’s export restrictions are creating significant volatility in the rare earth market.
- US and Australian companies are investing billions in developing domestic rare earth production and reducing dependence on China.
- Long-term demand for rare earths remains strong due to clean energy, electric vehicles, AI, and military technologies.
The rare earths market is facing uncertainty and potential price shifts, driven by geopolitical instability in Myanmar, U.S. trade policy shifts, and China’s strategic control over global supply chains. Industry leaders believe these factors could disrupt supply and provide a much-needed boost to rare earth prices, which have struggled due to Chinese market manipulation and overproduction.
The Geopolitical “Wildcard” in Rare Earth Supply
Myanmar, the world’s fourth-largest producer of rare earths, has seen major supply disruptions due to armed conflict. The Kachin Independence Army’s seizure of key mining hubs, Panwa and Chipwe, has raised concerns over future output. Given that Myanmar supplies 40% of the global market for heavy rare earths like dysprosium and terbium, further instability could significantly impact global pricing reports by Angela East, Mining.com.au (opens in a new tab).
Ms. East spoke with multiple subject matter experts suchas Victory Metals (ASX:VTM) CEO Brendan Clark (opens in a new tab) and Managing Director of Critica (ASX:CRI) a rare earth explorer Philippa Leggat (opens in a new tab).
U.S. Tariffs and Rare Earths Supply Chain Realignment
President Donald Trump’s push to impose tariffs on imports, including a 25% tariff on Chinese neodymium-iron-boron (NdFeB) magnets starting in 2026, has created additional volatility in the market. While the U.S. is making efforts to rebuild its rare earth supply chain, it remains highly dependent on Chinese imports, as most NdFeB magnets come embedded in products already imported into the country.
Despite these challenges, MP Materials (NYSE: MP), America’s rare earth prize, has begun domestic production of NdPr metal and trial production of automotive-grade NdFeB magnets at its Texas facility, marking a critical step toward U.S. supply chain independence. However, full-scale domestic production remains years away, keeping the market vulnerable in the short term.
China’s Strategic Leverage Over Rare Earth Exports
China continues to weaponize its control over rare earths, recently imposing export restrictions on key elements like antimony, germanium, and gallium—a move that spiked global prices. If Beijing chooses to block rare earth exports entirely, it could trigger a rapid market surge but also accelerate Western efforts to establish alternative supply chains.
Australia and U.S. Ramp Up Rare Earth Investments
To counter reliance on China, billions of dollars are flowing into rare earth projects in Australia and the U.S.:
- Victory Metals (ASX: VTM) is advancing a heavy rare earths project in Western Australia, leveraging low-cost, clay-hosted deposits to speed up production.
- Lynas Rare Earths (ASX: LYC) is developing a processing plant in Texas with backing from the U.S. Department of Defense.
- American Rare Earths (ASX: ARR) is developing the Halleck Creek Project in Wyoming, which could become the largest rare earth mine in North America.
- The U.S. Department of Energy and the Department of Defense have collectively awarded over $440 million in funding to support rare earths projects.
Strong Demand, Policy Risks Remain Looking Beyond the Horizon
While rare earth prices remain depressed in the short term, industry experts remain bullish on long-term fundamentals. Demand is expected to surge due to clean energy initiatives, electric vehicles, AI, computing, and military applications.
However, the success of Western supply chain initiatives hinges on three factors:
- Scaling up domestic processing and refining to reduce reliance on China, a necessity Rare Earth Exchanges continues to chronicle.
- Advancing rare earth processing technologies to improve efficiency and sustainability.
- Strengthening strategic alliances with key partners like Australia, Canada, and the EU.
- Rare Earth Exchanges suggests a specific critical mineral and rare earth industrial policy
American Rare Earths CEO Chris Gibbs (opens in a new tab) sums it up in the interview with Ms. East: “REEs are critical for national security, clean energy, and next-generation technology. While pricing volatility may persist, the long-term trajectory is highly positive.”
With increasing government support, investment, and strategic realignments, the rare earths sector is poised for a major transformation—but the road ahead remains uncertain and heavily dependent on geopolitical developments.
See Mining.com.au
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