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China Has Assumed Global Leadership in Rare Earths, Strategic Minerals for High-Tech. The Country Controls the Production Chain, Keeps Prices Low, and Faces Few Viable Alternatives, While the US, Europe, and Brazil Seek to Reduce Dependence.
China has consolidated an almost unchallenged position in the rare earth sector, essential inputs for high-tech technologies such as electric cars, wind turbines, smartphones, and defense systems.
The control of the production chain, from raw ore to high-performance magnets, has made Beijing the key player in this market, with no competitors able to rival in scale and costs.
According to a report by Folha de S.Paulo published this Friday (29), Zhang Xigang, director of Rising Nonferrous Metals Share — a branch of one of the two state conglomerates in the sector — stated that Chinese dominance is likely to persist for many years.
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He declared that global dependence on the Chinese supply chain is inevitable, and that attempts by Western countries to reduce this influence are likely to fail.
Western Dependence and Attempts at Reaction
The United States, European Union, and Japan have been trying to create their own routes for the production of critical minerals and magnets.
The goal is to reduce dependence on China, which accounts for about 70% of extraction, 90% of processing, and 93% of magnet manufacturing based on rare earths.
Despite investments, experts believe it is unlikely that the West will be able to break this hegemony in the short term.
The Asian country has built an integrated system over decades, supported by state policies, tax subsidies, and strategic acquisitions in foreign companies.
This has allowed them to keep prices low, discouraging rivals from competing.
At times, Beijing has used export control as a tool for political pressure.
The European Union has accused China of adopting economic blackmail practices, while Washington has already denounced restrictions as a bargaining chip in trade negotiations.
Even when it allows the flow of exports, the Chinese government closely monitors the volumes sent, avoiding stockpiling abroad.
Strategy Built Over Decades
The vision of leadership in rare earths dates back to the late 1980s, when then-leader Deng Xiaoping emphasized that, just as the Middle East had oil, China had these strategic minerals.
In the following years, mining expanded rapidly, favored by lax environmental regulations that allowed low-cost operations.
In the 1990s, Beijing began to target more lucrative steps in the chain.
Two state-owned companies partnered with American investors and acquired the magnet division of General Motors in the United States.
In less than a decade, factories were closed on American soil, machines were transferred to China, and workers were laid off.
The operation marked the beginning of the migration of knowledge and productive capacity to Chinese territory.
In the following decade, Beijing adopted export quotas and tax incentives, suffocating foreign competitors.
As highlighted by Folha de S.Paulo, Western suppliers could not compete on price when customers obtained much lower quotes directly from China.
The result was the closure of the last magnet factories in the United States in 2010.
Geopolitical Impact and Global Response
Dependence became evident that same year when an unofficial embargo by Beijing against Japan exposed the vulnerability of global supply chains.
Tokyo reacted by creating strategic stockpiles and investing in the recycling of minerals extracted from used products.
Meanwhile, China further consolidated the sector, centralizing mining in two state giants: China Northern Rare Earth and China Rare Earth Group.
The latter controls Rising Nonferrous Metals, whose leadership publicly advocates for the country’s global influence.
The entry of mining companies in the US and Australia has not changed the scenario.
Whenever new competitors emerge, Beijing raises its production quotas and lowers prices, keeping profit margins low and making the economic feasibility of projects outside the country difficult.
Obstacles for Rivals
Experts assert that reaching Chinese levels of efficiency is unlikely.
In addition to production scale, the country possesses exclusive processing technologies that are not shared with foreigners.
This makes competition more costly and risky. The White House has been adopting measures to try to stimulate domestic industry.
In July, the US government secured a minimum price for MP Materials, a company based in Las Vegas, committing to purchase part of its production of neodymium-praseodymium at prices higher than those practiced by China.
The goal is to make operations financially viable, even at higher costs.
At the G7, leaders are discussing the creation of international standards that could limit the entry of ultracheap Chinese products in the future.
However, analysts doubt there is a market for non-Chinese more expensive magnets outside the military sector, where national security may justify additional spending.
According to Folha de S.Paulo, even with slim margins, Chinese state-owned enterprises continue to invest heavily, ensuring technological advancement and almost insurmountable barriers for international competitors.
What Is at Stake for the Future
The competition for control of rare earths shows how strategic supply chains can become instruments of geopolitical power.
For the West, diversifying suppliers is a costly and time-consuming challenge.
For China, keeping prices low and ensuring technological dominance means extending its advantage.
While the US, Europe, and Japan invest in alternatives, experts warn that developing countries like Brazil may remain dependent on Chinese supply, even while possessing their own reserves.
The cost of mineral processing on a competitive scale remains an obstacle.
Given this scenario, the question that persists is: To what extent can Chinese leadership in rare earths redefine the global power balance?
O Maior azar que eu tive foi ter nascido no Bostil onde vc não tem direito a nada e tudo é difícil pra conquistar sem contar que cada político que entra sempre **** do povo