The Rare Earth Industry Association provides the latest information on global rare earth supplies, highlighting the need for a diverse and resilient global supply chain and the critical role of REIA in ensuring this.
Few materials punch above their weight in modern life like rare earth elements (REEs). The best known are high-performance permanent magnets (NdFeB and SmCo) that convert electricity into motion in everything from electric vehicle (EV) drivetrains and factory robots to precision servos in consumer electronics and guided weapons. Other products supported include catalytic converters, petroleum refining, high refractive glass and ceramics, abrasives, and special alloys.
Ten years ago, “critical minerals,” including many of the REEs, were far from one-sided. Today, they sit at the intersection of industrial policy, national security, and the transition to clean energy. Critical mineral laws and standards have proliferated rapidly since 2020, and policy responses to secure their supply have expanded accordingly, as governments seek both resilience and accountability in these supply chains as demand increases.
This policy agenda was also driven by experience. Most notably, the 2010 China-Japan dispute that disrupted REE trade and the subsequent 2014 World Trade Organization ruling against China’s export quotas. These episodes have made it clear that some challenges can disrupt entire value chains, and this has become even clearer over the past year as REE export controls have taken center stage in global trade negotiations.
Regardless of the political climate of the day, there is a recognition that value chains need to change to ensure mobility, energy security and national security challenges are met. Change doesn’t happen overnight, but the past year has seen significant movement towards building more diverse and resilient global value chains.
The role of REIA in a dynamic global system
Two dynamics ensure continued attention. Electrification will steadily increase the demand for magnets in vehicles, wind turbines, industrial automation, and defense systems. At the same time, globally, the use of export controls and investment screening for advanced materials is becoming commonplace in policy-making, with REEs being directly targeted. This combination increases the premium for transparency (buyers require security of supply) and coordination. This is because there are few single actors who can bring all stages of production on-site economically or quickly.
The Rare Earth Industry Association (REIA) exists to help our members meet these challenges. As a global not-for-profit organization that spans miners, processors, and manufacturers, and seeks to connect OEMs, research institutions, and policy makers, our mission is to “contribute, promote, and advance the sustainable development of the global rare earth value chain.”
In practical terms, this means neutral conferences across regions, unbiased analysis, pre-competitive work on standards and methodologies, and building the capacities and capacity needed for more resilient REE value chains.
In a world of rising geopolitical tensions and rising demands, the ability to bring stakeholders together around a common challenge, a common language, and a common goal is more important than ever.
Fragile ecosystems: by inertia and design
Over the past two decades, as Western countries have shunned the difficult and often environmentally damaging processing of rare earths, China has strengthened its mining expertise, scaled up complex separation and purification processes, and established unprecedented advantages in most aspects of the value chain.
According to data from the United States Geological Survey (USGS), in 2024, approximately 69% of the world’s mining output (in terms of rare earth oxides) will be produced in China. Processing is even more lopsided. The IEA’s recent projections show that refining and separation is concentrated in very few places, with the three largest refining countries (China, Malaysia and the US) accounting for 98% of production capacity in 2023, with little hope of bringing it online by 2030. On the downstream side, China has an overwhelming advantage in magnet manufacturing, accounting for approximately 95% of the world’s NdFeB production, and the reality is that the world is heavily dependent on magnet manufacturing. country for supply.
This concentration of expertise and manufacturing creates severe supply bottlenecks in the REE value chain. The system’s vulnerabilities were exposed once again in December 2023, when China banned the export of key rare earth extraction, separation, and magnet manufacturing technologies, and subsequently expanded material export restrictions in 2025 to include seven rare earth types important for commercial use. The real effects were immediate. Shipping was delayed due to licensing requirements and rigorous vetting. China’s magnet exports have fallen by about 75% in the two months since the first curbs in April 2025, forcing some automakers to halt production.
This measure has created supply problems in medium and heavy rare earth inputs and finished magnets, precisely where Western industry is most affected. Although further regulatory tightening has been postponed over the past month, significant tensions around supply remain, and many see an opportunity to redress current imbalances and build more resilient global value chains that can withstand these types of disruptions in the future.
Impact of restrictions and responses facilitated by them
Modern supply chains are optimized for cost rather than redundancy. When supply challenges impact critical inputs, the result tends to be delivery uncertainty, working capital strain, and increased price volatility. Analysts predict that even after the recent diplomatic détente over REE, new red tape and compliance frictions will linger and that the experience could prompt real and lasting change in the industry. To address this, the following policy and investment responses have been evident for some time in major REE purchasing jurisdictions:
Japan has produced perhaps the most mature approach, combining strategic stockpiling and targeted offtake/financing through JOGMEC (including long-term supply agreements) with aggressive R&D and recycling promotion. The European Union’s Critical Materials Act (CRMA) came into force on May 23, 2024, and in addition to the 2030 production capacity benchmarks (at least 10% of annual consumption is mined in the European Union (EU), 40% processed within the EU and 25% from recycling), it sets out diversification rules that no more than 65% of strategic raw materials at each stage should be sourced from a single third country. In parallel, the European Commission is supporting processing and magnet initiatives and recently announced the REsourceEU plan to reduce China’s dependence on rare earth-containing minerals. In the United States, the approach has recently shifted from subsidies to full industrial policy. In July 2025, the US Department of Defense acquired a major stake in MP Materials, guaranteeing a floor price for key rare earth elements, locking in the second magnet factory in the US, and expanding production. This is an obvious attempt to de-risk private investment along the mine-to-magnet path.
These are all measures designed not to take away absolute control of global value chains, but to increase geographic independence and create a stronger global network with multiple hubs for each key process in the value chain.
conclusion
Significant global activity is underway that promises to change the nature of the global value chain for REEs, but significant challenges remain to create systems that are truly resilient in the face of global trade disruptions.
This requires building separation capacity and ramping up new mines to full capacity faster. Midstream depth is also needed, including solvent extraction, metal fabrication, and alloying facilities close to end markets to reduce both logistics and policy risks. Magnet manufacturing needs to be scaled up, otherwise upstream profits will not translate into real security of supply. Pre-consumer recycling of scrap and used motors also remains untapped, but this is a structurally important “second supply” that can be built where there is demand, shortening the loop and improving ESG performance.
Finally, demand-side engagement with users of rare earth products is needed to ensure market development, with channels of engagement open to address common challenges and concerns.
With increased policy and investment support, progress is being made in all of the areas listed above. For REIA, as the leading trade association representing the REE sector, helping our members implement relevant programs around the world to support more resilient value chains will be a key priority in the coming months and years.
This article will also be published in the quarterly magazine issue 24.
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