The Rare Earth Industry Association provides an update on the global rare earth supply, emphasising the necessity for diversified and resilient global supply chains and the important role of the REIA in securing this.
Few materials punch above their weight in modern life like the rare earth elements (REEs). The best known are turned into 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 munitions. Others underpin catalytic converters and petroleum refining, high-refraction glass and ceramics, polishing powders, and specialty alloys.
A decade ago, ‘critical minerals’, including many of the REEs, were far from the front pages; today, they sit at the intersection of industrial policy, national security, and the clean energy transition. With demand increasing, the policy response to securing their supply has scaled accordingly – with a rapid proliferation of critical mineral laws and standards since 2020, as governments seek both resilience and responsibility in these supply chains.
This policy agenda was also catalysed by experience – most visibly the 2010 dispute between China and Japan that disrupted REE trade, and the subsequent 2014 World Trade Organization ruling against China’s export quotas. Those episodes made clear that a handful of chokepoints could disrupt entire value chains, and this has become even more evident in the past year, with export controls on REEs occupying a central role in global trade negotiations.
Regardless of the political situation of the day, there is acceptance that value chains need to change to reliably meet the challenges of mobility, energy security, and national security. Change will not happen overnight, but the past year has seen significant movement toward building more diversified, more resilient global value chains.
The role of REIA in a dynamic global system
Two dynamics guarantee continued attention: electrification will steadily expand magnet demand in vehicles, wind turbines, industrial automation, and defence systems. At the same time globally, the use of export controls and investment screening around advanced materials is becoming normalised within policy making, with REEs squarely in scope. The combination raises the premium on transparency – buyers need security of supply – and on coordination, because few single actors can onshore every step of production economically or quickly.
The Rare Earth Industry Association (REIA) exists precisely to help its members address these challenges. As a global non-profit organisation spanning miners, processors, manufacturers, and seeking to connect with OEMs, research institutes, and policymakers, our mission is to “serve, promote and advance the sustainable development of the global rare earth value chain.”
In practical terms, that means neutral convening across regions, unbiased analysis, pre-competitive work on standards and methodologies, and building the capability and capacity needed for more resilient REE value chains.
In a world of both rising geopolitical tension and rising demand, the ability to gather stakeholders around common challenges, a common language, and common goals is more important than ever before.
A fragile ecosystem: By inertia and design
Over the past 20 years, as Western nations shied away from the challenging and often environmentally impactful processing of REEs, China boosted its expertise in mining and in scaling the complex separation and refining processes to the point where it has developed an unprecedented dominance in most aspects of the value chain.
At the mining end of the chain, U.S. Geological Survey (USGS) data indicate that in 2024, China produced roughly 69% of global mined output (rare-earth oxide equivalent). Processing is even more skewed: the IEA’s recent outlook shows refining and separation concentrated in very few places, with the three largest refining countries (China, Malaysia, and the US) accounting for 98% of capacity in 2023, with little diversification expected to be online by 2030. At the downstream end, China’s dominance of magnet manufacturing is overwhelming, with around 95% of global NdFeB output, a reality that leaves the world largely dependent on one nation for supply.
This concentration of expertise and manufacturing creates acute supply bottlenecks in the REE value chain. The fragility of the system became evident once again when, in December 2023, China prohibited the export of key rare earth extraction, separation, and magnet-making technologies – and then, in 2025, expanded its material export controls to include seven rare earths important for commercial applications. The practical effect was immediate: licensing requirements and tighter screening slowed shipments; Chinese magnet exports dropped roughly 75% in the two months after initial curbs in April 2025, forcing production pauses at some automakers.
The measures caused supply problems precisely where Western industries are most exposed: mid and heavy rare earth inputs and finished magnets. While in the past month, further tightening of restrictions has been put on hold, significant nervousness around supply still exists – and with it, many sense an opportunity to redress the current imbalance and create a more resilient global value chain that is able to withstand this type of disruption in the future.
The impact of restrictions and the response it has promoted
Modern supply chains are optimised for cost, not redundancy. When supply challenges hit critical inputs, the result tends to be uncertainty in delivery times, working capital strain, and increased pricing volatility. Analysts expect that even after the recent diplomatic de-escalation around REEs, new paperwork and compliance frictions will linger, and that the experience could prompt genuine and permanent change for the industry. To address this, policy and investment responses have been evident in the major REE-purchasing jurisdictions for some time, for example:
- Japan has arguably created the most mature approach, combining strategic stockpiles and targeted offtake/financing via JOGMEC (including long-term supply arrangements) with aggressive R&D and recycling pushes.
- The European Union’s Critical Raw Materials Act (CRMA) entered into force on 23 May 2024 and sets 2030 capacity benchmarks – at least 10% of annual consumption mined in the European Union (EU), 40% processed in the EU, and 25% from recycling – plus a diversification rule that no more than 65% of any strategic raw material at each stage should come from a single third country. In parallel, the European Commission is backing processing and magnet initiatives and recently announced its REsourceEU Plan to reduce dependence on minerals, including REEs from China.
- In the United States, the approach has more recently shifted from grant-making to full industrial policy. In July 2025, the U.S. Department of Defense took a major equity stake in MP Materials and guaranteed a floor price for key REEs, anchoring a second US magnet factory and extending offtake – an explicit attempt to derisk private investment along a mine to magnet pathway.
These are all measures designed not to wrest absolute control of global value chains, but to create greater geographical independence and to create a sturdier global network with multiple hubs for each of the major processes in the value chain.
Conclusions
Significant global activity is underway that promises to change the nature of global value chains for REEs, but significant challenges remain in building a system that is truly resilient in the face of global trade disruption.
It requires new mines ramping up to full production capacity faster, along with establishing separation capacity. It also requires midstream depth: solvent extraction, metal making, and alloying facilities closer to end markets to reduce both logistics and policy risk. Scaled-up magnet manufacturing is needed, without which, the upstream gains will not translate into actual supply security. And the recycling of pre-consumer scrap and end-of-life motors also remains underdeveloped, but is a structurally important ‘second supply’ that can be built where demand resides – shortening loops and improving ESG performance.
Finally, demand-side engagement is needed with the users of rare-earth products to ensure that markets develop, and channels of engagement are open to address common challenges and concerns.
With increasing policy and investment support, advances are being made in all the areas above. For REIA, as the leading industry body representing the REEs sector, assisting our members to implement relevant programs globally in support of more resilient value chains will be a key priority in the months and years ahead.
Please note, this article will also appear in the 24th edition of our quarterly publication.
