China’s Rare Earth Monopoly Not Forever, Markets Decide: Experts

China’s long-standing dominance over rare earth elements has alarmed policymakers in Washington and allied capitals, but industry analysts argue the advantage is neither natural nor permanent. Rather than scarcity, they say, China’s leverage reflects political choices that markets are already beginning to unwind.

Rare earth elements, a group of 17 metals essential to electric vehicles, renewable energy systems, consumer electronics, and advanced weapons, are widely distributed across the globe. Deposits exist in the United States, Australia, Brazil, and India. What set China apart was not geology, but its willingness over several decades to accept environmental damage, health risks, and state-directed losses that other countries rejected.

“People talk about rare earths as if they’re diamonds,” said Jack Lifton, a longtime industry analyst. “They’re not rare at all. What’s rare is a country prepared to do the dirty, expensive processing work without regard for long-term environmental cost.”

Beginning in the 1980s, Beijing invested heavily in mining and, crucially, in refining capacity, the most complex and polluting stage of production. Western producers, constrained by stricter environmental rules and liability standards, gradually exited the market. By the early 2020s, China accounted for roughly 70 percent of global mining and more than 90 percent of processing, creating a strategic choke point in global supply chains.

2010 Dispute With Japan

That concentration became a geopolitical concern after China slowed exports during a 2010 dispute with Japan and later imposed tighter licensing and technology controls amid rising tensions with the United States. In response, the White House recently sought assurances from Beijing that rare earth exports would not be curtailed, a move widely seen as buying time rather than resolving dependence.

Analysts say China’s effort to weaponize its advantage may ultimately undermine it. Export controls raise prices and inject uncertainty, making alternative supply chains economically viable for the first time in years. Governments in the U.S., Europe, and Australia are now subsidizing processing facilities, accelerating permits, and coordinating investment to reduce reliance on China.

Researchers at organizations such as RAND Corporation have warned that monopolies sustained by political coercion tend to be fragile. Once strategic risk outweighs cost savings, markets adapt. “China’s dominance exists because others chose efficiency over resilience,” Lifton said. “Now that calculation is changing.”

Rebuilding supply chains will take years, not months. Processing plants are capital-intensive, environmentally sensitive, and politically contentious. But experts agree the trajectory is clear: China’s grip, forged by tolerating costs others would not, is already being tested by markets that value reliability as much as price.

  china monopoly, not rare, rand corporation, rare earths, resources