As demand for rare earth elements has doubled since 2015, China’s growing status as the world’s largest supplier has created vulnerabilities that have rapidly exposed real economic risks. According to a report from the International Energy Agency (IEA), demand for magnet rare earths is expected to increase by more than 30 percent by 2030. However, rare earths are also among the most geographically concentrated minerals in the world across each stage of the supply chain.
Two decades ago, China accounted for roughly half of global permanent magnet output. Today, China accounts for roughly 60 percent of global mined production of magnet rare earths, more than 90 percent of refining, and 95 percent of permanent magnet production. The consequences of China’s dominance have been laid bare by recent export curbs on critical minerals.
Diversification efforts are accelerating in the United States, Europe, Japan and Australia, with new mining projects, refining capacity and recycling programs all in development. The IEA warns that without meaningful policy support, geographic concentration of supply will persist for at least another decade. Notable projects include MP Materials (United States), Lynas (Australia), Iluka Resources (Australia), Solvay (Belgium), Neo Performance Materials (Canada) and Energy Fuels (United States).
From a supply chain perspective, the U.S. Department of Defense is providing strategic funding to MP Materials under the Defense Production Act. The EU Critical Raw Materials Act targets 10 percent of EU consumption from domestic mining, 40 percent from in-bloc processing capacity and 25 percent from recycling by 2030. Major consumers including Tesla, Apple, General Motors, Ford, Volkswagen, Siemens Gamesa and Vestas are securing supply through long-term offtake agreements. Urban mining, e-waste recycling and alternative chemistries such as ferrite magnets and iron-nitride magnets form complementary pillars of the long-term diversification strategy.
