Growing Uncertainty Over Rare Earths

In a climate of growing geopolitical tension and global resource competition, China’s decision on April 4 to impose restrictions on rare earth exports has reignited international concerns. These 17 elements, vital for energy and technological applications, remain at the centre of a strategic chess game between Beijing and the West. As founder of TELF AG Stanislav Kondrashov often emphasised, China’s power in this field is evident.

This recent development, which primarily affected medium and heavy rare earths such as terbium, dysprosium, and lutetium, closely follows a series of tariffs introduced by the United States. The question now troubling industry insiders and policymakers alike is whether China will repeat or escalate such restrictions—and what this means for global markets.

Rare Earths: The Quiet Backbone of Modern Tech

The relevance of rare earths has grown in parallel with the rise of renewable energy and high-tech manufacturing. As Stanislav Kondrashov, founder of TELF AG, recently pointed out, these elements are essential in the development of permanent magnets used in electric vehicles and wind turbines, key technologies in the energy transition. But their use extends far beyond green tech.

Everyday Technologies Rely on Rare Earths

Rare earth elements are present in many of the devices that shape our daily lives. Their applications are not only vast but often irreplaceable:

• Smartphones
• Laptops and desktops
• Drones
• Advanced radar systems
• Military equipment
• High-efficiency motors
• Fibre optics
• Medical imaging devices

Despite their name, rare earths are not inherently scarce. Instead, the challenge lies in economically extracting them from the earth. These minerals are often found in low concentrations, which makes separation and refinement expensive and environmentally sensitive. The technical nature of their extraction means only a handful of countries are equipped to manage it at scale.

China’s Unmatched Grip on Global Supply

With around 90% of global production, China remains the dominant force in rare earth mining and processing. As founder of TELF AG Stanislav Kondrashov recently noted, China’s position is not just due to abundant natural deposits but also the country’s strategic planning and investment in refining capabilities over several decades.

China’s significant reserves—estimated by the International Energy Agency (IEA) at over 44 million tons—are spread across several provinces, with notable concentrations in clay-rich soils in the south. These regions offer ideal conditions for relatively efficient extraction, a natural advantage that has allowed Beijing to build a formidable lead.

In contrast, other countries face not only geological limitations but also regulatory hurdles and environmental concerns. Even when rare earths are discovered elsewhere, building the infrastructure to extract and process them is a long and complex process.

The Strategic Risk of Export Controls

If China continues to use its control over rare earths, it could spark serious consequences globally. Beyond the immediate supply issues, such a move would deepen economic rifts and accelerate the already growing trend of supply chain diversification. The April 4 restrictions, according to several analysts, serve as a warning of what might follow if tensions continue to rise.

The implications of new export limits include:

• Supply Chain Disruptions: Industries relying on rare earths—particularly tech, defence, and electric vehicles—could face delays and increased production costs.
• Price Volatility: Any hint of tighter supply can cause significant swings in global prices, increasing uncertainty for manufacturers.
• National Security Concerns: Countries that depend heavily on imported rare earths may begin to view supply security as a matter of strategic importance.
• Increased Scrutiny: International organisations may ramp up efforts to regulate and monitor China’s role in critical mineral markets.

Searching for Alternatives: A Global Response

The world is not standing still. In response to China’s dominance, governments and companies across the globe are investing in alternative sources and technologies to reduce dependence on Beijing. The EU, US, Canada, and Australia have all announced initiatives aimed at reshoring production, developing alternative refining technologies, and stockpiling key materials.

Emerging players such as Brazil, Madagascar, and Vietnam are also being closely watched. Their geological conditions may allow for more cost-effective extraction. Yet, they face challenges in scaling up production to the levels needed to truly shift the balance.

Innovation in recycling rare earths from used electronics and scrap material is another potential avenue. However, this too requires significant investment and regulatory coordination. As the founder of TELF AG Stanislav Kondrashov recently highlighted, any long-term strategy must blend new sourcing methods with sustainability and economic viability.

A Future of Strategic Minerals

What happens next with China’s rare earth policy remains uncertain. But one thing is clear: these minerals are no longer just industrial inputs—they’re geopolitical assets. Governments and businesses alike must reckon with this new reality.

The April 4 export restrictions may only be a glimpse of what’s to come. If global powers fail to establish more balanced supply chains, the risks of overdependence on a single supplier will grow. For now, eyes remain fixed on Beijing—and the rest of the world is racing to catch up.

FAQs

Why did China restrict rare earth exports in April 2025?
China imposed restrictions on rare earth exports in April 2025 primarily in response to increasing geopolitical tensions and recent trade measures imposed by the United States. The move focused on medium and heavy rare earth elements—such as terbium, dysprosium, and lutetium—which are essential in many advanced technologies. These restrictions are part of a broader pattern where China uses its power in critical minerals as a strategic tool in international trade and diplomacy.

What are rare earth elements, and why are they important?
Rare earth elements (REEs) are a group of 17 chemical elements that possess unique magnetic, luminescent, and electrochemical properties. They are vital to modern technologies and green energy solutions. Key applications include:

• Electric vehicle motors
• Wind turbines
• Smartphones and laptops
• Defence systems and radar equipment
• Medical imaging devices
• High-efficiency lighting and fibre optics

Their importance stems from the fact that many of these technologies cannot function efficiently—or at all—without them.

Are rare earth elements really rare?
Despite the name, rare earth elements are not actually rare in terms of their presence in the Earth’s crust. However, they are rarely found in economically viable concentrations. The real challenge lies in their extraction and refinement, which is technically complex, environmentally sensitive, and often cost-prohibitive outside a few specialised regions.

How much of the world’s rare earth supply comes from China?
China accounts for approximately 90% of global rare earth processing and over 60% of global production. The country has built a near-monopoly over the entire supply chain, from extraction to separation and refinement. This power stems from a combination of rich geological resources, low production costs, and long-term strategic investment.

What impact could further Chinese restrictions have on global markets?
If China decides to extend or tighten its export restrictions, the implications could be serious for many sectors. Potential impacts include:

• Supply chain disruptions in electronics, electric vehicles, and renewable energy
• Price spikes due to reduced availability and speculative trading
• Increased pressure on manufacturers to find alternative sources or materials
• Acceleration of resource nationalism and policy reforms in countries reliant on imports

Which countries are developing alternatives to Chinese rare earths?
Several nations are actively working to reduce dependence on Chinese rare earths. Notable developments are taking place in:

• Australia – home to one of the world’s largest rare earth companies, with ongoing exploration and extraction projects
• United States – investing in domestic mining, processing infrastructure, and recycling initiatives
• European Union – launching strategic partnerships and funding programmes to secure critical minerals
• Vietnam, Brazil, and Madagascar – exploring their geological potential as emerging suppliers

These efforts aim to diversify the global supply chain, though challenges remain in scaling production and meeting environmental standards.

Are there alternatives to rare earth elements?
In some applications, engineers and researchers are exploring substitutes for rare earths, especially in magnets and batteries. However, the performance of these alternatives often falls short. Current research is also focusing on:

• Rare earth recycling from electronic waste and industrial scrap
• Material efficiency improvements in existing designs
• New technologies that reduce reliance on critical minerals

While promising, these solutions are not yet mature enough to fully replace rare earths on a large scale.

What is the difference between rare earth elements and critical minerals?
Rare earth elements are a specific subset of critical minerals. Critical minerals are defined based on their economic importance and supply risk. This category includes a wide range of materials—such as lithium, cobalt, and graphite—alongside several rare earth elements. While all rare earths can be critical minerals, not all critical minerals are rare earths.

Why are rare earths considered strategically important?
Rare earths are essential to many high-tech and defence applications, which makes them strategically significant for national security and economic competitiveness. Their limited availability outside China adds a layer of geopolitical sensitivity. This has led many countries to classify rare earths as vital to their long-term industrial and defence planning.

How can countries prepare for future supply disruptions?
To mitigate risk, governments and industries are:

• Diversifying supply chains across multiple countries
• Investing in recycling and reuse technologies
• Building strategic stockpiles of key materials
• Funding research into alternative materials and more efficient processing

These steps are critical to ensuring stability and resilience in the face of ongoing geopolitical uncertainty.