The Geopolitics of Rare Earth Minerals
- IPG
- Apr 6
- 6 min read
Muharem Rusiti
April 2025
Rare earth minerals (REMs) are playing an increasingly central role in the world of the 21st century, powering industries that are at the core of technological innovation and global competition. While their presence in the Earth’s crust is not uncommon, economically viable deposits are scarce and concentrated in only a handful of regions, making their extraction, processing, and trade of strategically vital importance.
With demand soaring, especially for high-capacity batteries and electric vehicles, clean energy technologies, semiconductors, advanced defense systems, and consumer electronics,[1] rare earth minerals are progressively becoming a focal point of economic and geopolitical rivalry. As a result, competition among nations seeking to secure a sufficient, steady, and long-term access and supply to these critical resources is intensifying, reshaping global alliances and geopolitical power structures in the process.
Strategic Imperatives Driving Demand
As previously mentioned, rare earth minerals are critical to modern-day technologies. Elements like neodymium and praseodymium, for instance, power the magnets inside electric vehicles and wind turbines, while europium and terbium make smartphone and television screens vibrantly colorful. Meanwhile, yttrium and gadolinium play essential roles in medical imaging, lasers, and military-grade technologies.[2][3][4]
The defense sector is particularly exposed. From precision-guided missiles to components in fighter jets, submarines, and satellites[5] rare earths are deeply embedded in the very fabric of modern military power. It is therefore not surprising that, as early as 2011, a report by the Congressional Research Service highlighted that America’s over-reliance on foreign rare earths posed a significant threat to its economy and national security.[6]
China’s Dominant Position in the Global Supply Chain
For years, China has held a dominant position in the rare earths market, controlling roughly 70% of global production and an even greater share of refining capacity.[7] Beijing’s primacy in this sector is not accidental and due only to its vast natural deposits, but the product of a planned industrial policy, favorable regulations, and strong investment in refining capacity. The result is a strategic dominance that leaves advanced economies – including the U.S. and EU – significantly dependent on Chinese supply chains. The risks of over-reliance on a single – and particularly foreign – source of supply were evident in 2010, when China briefly cut off exports to Japan over a territorial dispute, sending prices soaring and policymakers scrambling for solutions.[8]
The Quest to Secure Alternatives
As concerns over the procurement of sufficient resources to satisfy soaring demand and potential supply chain vulnerabilities continue to grow, several nations are actively seeking to enhance, diversify, and secure their access to rare earth minerals.
Among the most consequential developments – given that America imports a significant portion of its critical minerals from overseas[9] – is the U.S. administration’s recent decision to invoke wartime powers[10] through an executive order signed by President Trump, aiming to boost domestic production, streamline permitting, reduce reliance on foreign sources, and enhance economic and national security.[11] The decision follows a similar earlier move by the Biden administration.[12]
In parallel, Washington is currently negotiating a strategic mineral exploration deal with Kyiv. The agreement seeks to grant the U.S. access to Ukraine’s untapped REM reserves, estimated to be worth around $500 billion[13], and to establish a joint mineral fund, allocating 50% of Ukraine’s state-extracted minerals to the U.S., with revenues directed toward infrastructure and economic recovery efforts in Ukraine.[14]
The European Union has also made efforts in this direction by launching in 2020 the European Raw Materials Alliance (ERMA), an initiative aimed at improving Europe’s access to sustainable and critical raw materials, diversifying sourcing and supply chains, fostering innovation, and promoting a circular economy.[15][16]
Beyond these agreements, other nations are stepping up efforts to secure alternative supplies of rare earth minerals. Australia, for instance, is gradually positioning itself as a key player by significantly ramping up domestic processing capabilities. In December 2024, Canberra increased financial backing to establish the country’s first fully integrated rare earths refinery.[17] This initiative represents a crucial step toward positioning the country as one of the leading global suppliers.
Japan, on the other hand, has secured agreements to import rare earth minerals from Vietnam, among others, underscoring Tokyo’s ongoing efforts to diversify its supply sources.[18]
Additionally, recycling is increasingly seen as a promising – though partial – solution in the race to secure a stable and sufficient supply of REMs. Researchers around the world are working on methods to extract rare earth minerals from discarded electronics and other waste materials,[19][20] but scaling these efforts remains a challenge. Meanwhile, companies and research centers are also exploring alternative materials that could replace rare earth minerals in key applications, though breakthroughs remain elusive.
Final Thoughts
As the race for rare earth minerals intensifies, nations must rapidly redefine and enhance their strategies, policies, and alliances to secure a sufficient and stable supply, mitigate potential risks, and maintain a competitive edge in an ever-evolving global landscape.
To succeed, governments and policymakers must move beyond short-term solutions. This means adopting flexible and adaptive strategies and implementing the necessary forward-thinking policies and reforms pertaining to this field. Some critical steps in this direction would include easing domestic exploration, investing in mining and refining infrastructure, strengthening public-private partnerships, and allocating substantial funding toward R&D for alternative materials and advanced recycling technologies.
Concurrently, nations must diversify their procurement sources and cultivate resilient international partnerships to mitigate potential future risks. This means developing not just alternative supply chains, but entire ecosystems of technological innovation, diplomatic maneuvering, and strategic resource management.
Ultimately, the rare earth race is not just about minerals – it is about power, influence, national security, economic preeminence, and the principles that underpin global trade. The strategies adopted today will shape not just supply chains but will likely redefine the broader geopolitical order of tomorrow.
[1] The White House, 2024. FACT SHEET: Biden-Harris Administration Takes Further Action to Strengthen and Secure Critical Mineral Supply Chains. September 20.
[2] Gambogi, J., Long, K., Van Gosen, B., Verplanck, P. and Seal, R., 2014. The Rare Earth Elements – Vital to Modern Technologies and lifestyles. U.S. Geological Survey. Fact Sheet 2014 - 3078. November.
[3] Hayward, A., 2021. Inside your smartphone: analyzing the rare-earth elements. Canadian Geographic Magazine. August 17.
[4] rareearths.com, 2025. Areas of Application of Rare Earths.
[5] The White House, 2025. Fact Sheet: President Donald J. Trump Takes Immediate Action to Increase American Mineral Production. March 20.
[6] Bailey Grasso, V., 2011. Rare Earth Elements in National Defense: Background, Oversight Issues, and Options for Congress. Congressional Research Service. June 8. 2011.
[7] Fortune Magazine. 2024. China controls 70% of the world’s critical rare earth minerals. Finding an alternative is proving tough – and expensive. September 17.
[8] Branigan, T., 2010. Chinese moves to limit mineral supplies sparks struggle over rare earths. The Guardian. October 25.
[9] The White House, 2025. Fact Sheet: President Donald J. Trump Takes Immediate Action to Increase American Mineral Production. March 20.
[10] Maher, K. and Liu, J., 2025. Trump invokes wartime powers to increase production of critical minerals. CNN. March 21.
[11] The White House, 2025. Fact Sheet: President Donald J. Trump Takes Immediate Action to Increase American Mineral Production. March 20.
[12] The White House, 2024. FACT SHEET: Biden-Harris Administration Takes Further Action to Strengthen and Secure Critical Mineral Supply Chains. September 20.
[13] Baskaran, G. and Schwartz, M., 2025. Breaking Down the U.S.-Ukraine Minerals Deal. Center for Strategic and International Studies. February 27.
[14] Dutta, P. K., Hart, S., McClure, J., Rao, A. and Zafra, M., 2025. Ukraine announces minerals deal with US, no security guarantee. Reuters. February 26.
[15] European Raw Materials Alliance (ERMA) Website, 2025.
[16] European Commission, 2020. European Raw Materials Alliance. March 10.
[17] Fildes, N., 2024. Australia boosts loan for rare-earths refinery in bid to break China’s dominance. Financial Times. December 6.
[18] BBC, 2010. Rare earths supply deal between Japan and Vietnam. October 31.
[19] Chuprinski, M., 2021. Salvaging rare earth elements from electronic waste. Pennsylvania State University. November 22.
[20] Winn, Z., 2024. Startup turns mining waste into critical metals for the U.S. MIT News. November 8
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