At the beginning of October 2025, China again tightened export control of rare earth metals, covering twelve elements as well as technologies for their processing and magnet production. Although the market for these raw materials is only worth approximately USD 6.5 billion. — 33 times less than the copper market — their importance for the global economy is disproportionately greater. Rare earths are crucial for the production of batteries, chips, wind turbines, defense systems and artificial intelligence technologies.
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China dominates, the West reacts
The West is doing its best to keep up with China. US President Donald Trump and Australian Prime Minister Anthony Albanese signed an agreement on the supply of key minerals on Monday.
Under the agreement, both countries are to invest USD 1 billion each in the next six months in projects related to the extraction and processing of raw materials. A minimum price will also be established for the so-called critical minerals, i.e. key to the economy and security, the availability of which is limited. The White House announced that investments will focus on deposits worth a total of USD 53 billion.
According to the Goldman Sachs report “Managing Disruption Risk From Rare Earths and Other Critical Minerals”, Beijing uses its dominant position in the global supply chain as a tool of economic and political pressure. China today controls 69 percent. world extraction, as much as 92 percent refining and almost 98 percent production of magnets based on rare earth elements.
Analysts warn that the greatest risk of further export restrictions concerns samarium, graphite, lutetium and terbium – critical raw materials for the defense and semiconductor industries. Samarium, essential for the production of extremely resistant samarium-cobalt (SmCo) magnets used in the aerospace sector, remains virtually entirely under Chinese control.
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The trials drag on for years
Western economies are intensifying their attempts to become independent from Chinese supplies, but they face serious obstacles. The discovery and launch of a new rare earth mine takes on average 8 to 10 years, and the construction and commissioning of a refinery another 3-5 years. In addition, there are technological barriers, lack of experts and environmental issues. Outside of China, the largest investments are currently made by Iluka Resources in Australia, Lynas in Malaysia and MP Materials in the US, but – as the report emphasizes – the global supply chain still remains deeply dependent on Beijing.
According to Goldman Sachs calculations potential disruptions in rare metal supplies could reduce U.S. production by as much as $150 billion. and further increase inflation. This phenomenon is part of a broader “cycle of raw material control”, in which countries – striving for self-sufficiency – use domination in production as a political instrument.
For investors, the recommended way to protect against risk is shares of companies outside China. Goldman Sachs indicates, among others: on the Australian Iluka, predicting a deficit in the rare earth metals market that will persist until 2027.
