There is an open dispute in the global market: countries’ and companies’ strategies reflect growing concerns about securing access to minerals that have become essential but whose supply is increasingly constrained.
The global rare earths market has entered a phase of sustained growth, driven by structural shifts in the world economy. According to a study by consultancy Mordor Intelligence, the sector is expected to grow at an average annual rate above 8%, rising from around $10 billion in 2024 to between $14 billion and $16 billion by the end of the decade. This trajectory is corroborated by other international consultancies. Grand View Research points to even stronger expansion, driven by rising demand for permanent magnets, while Allied Market Research highlights the critical role of rare earths in transport electrification.
Bloomberg NEF notes that the critical minerals supply chain, in which rare earths play a central role, will be among the most strained over the next two decades as the global economy accelerates decarbonization. More than the absolute market value, analysts highlight its sensitivity to technological innovation: every advance in electric mobility, renewable energy, or artificial intelligence strengthens demand.
After years of quietly increasing importance, rare earths have entered a phase of open competition between global powers
Value Chains Under Pressure
While demand is rising, supply remains constrained by structural bottlenecks. The rare earth value chain is highly concentrated and technically demanding, with critical choke points in separation and refining—complex, capital-intensive, and environmentally sensitive processes. 2024 data from the US Geological Survey (USGS)—the US government scientific agency responsible for monitoring natural resources and producing global geological reference data—shows that although reserves are distributed across several continents, processing capacity remains heavily centralized. This asymmetry creates a market vulnerable to supply shocks, price volatility, and political decisions.
The International Energy Agency (IEA), in its report on critical minerals, warns that the development timelines for new mining projects can exceed a decade, making it difficult to respond to rapidly increasing demand. At the same time, stricter environmental regulations in Western countries have slowed or delayed new investments, contributing to constrained supply while protecting the planet and life.
China’s Dominant Architecture
China’s leadership in the rare earth market is not a geological accident but the result of a decades-long industrial strategy. The country has consolidated a dominant position in extraction and, more importantly, in processing—the true value center of the chain. According to the USGS, China still accounts for around 60% of global production, but its share exceeds 80% in refining. This control allows it to exert significant influence over prices and trade flows.
Reports from the Center for Strategic and International Studies (CSIS), an influential Washington-based think tank specializing in international policy, security, and global economics, highlight that Beijing has historically used this dominance as a foreign policy tool, particularly during trade tensions with Japan and the United States. Although explicit restrictions are rare, the possibility of state intervention remains a market risk factor. State-owned companies such as China Northern Rare Earth and China Minmetals consolidate this ecosystem, benefiting from economies of scale and vertical integration that is difficult to replicate in the short term.
The US and Other Countries’ Response
Facing China’s dominance, the United States and other countries have intensified efforts to rebuild domestic capacity. The Mountain Pass mine in California has regained strategic importance but remains dependent on external processing, often in China. The US government has encouraged mining, refining, and recycling projects. At the same time, the Department of Defense has supported initiatives to secure resilient supply chains, particularly for military applications.
In Europe, the adoption of the Critical Raw Materials Act marked a shift in the bloc’s industrial policy. This European Union (EU) regulation aims to reduce external dependence on strategic raw materials, setting targets for at least 10% of annual consumption to be extracted within the EU, 40% processed domestically, and 15% sourced from recycling by 2030. The legislation also limits reliance on a single supplier country and accelerates permitting for strategic projects. Environmental impacts from mining remain an unresolved issue, contributing to social resistance and strict regulatory requirements.
Emerging New Hubs
In a reconfiguring market, countries such as Australia and Canada are emerging as credible alternatives to Chinese dominance. Australia’s Lynas Rare Earths, for example, has become the largest producer outside China, with operations including processing in Malaysia. Canada is pursuing an integrated approach combining mining, technological development, and high environmental standards. In Africa, geological potential is also drawing increasing attention.
Tanzania and Madagascar have already advanced significant projects, while Mozambique is appearing on investors’ radar. Still in an early stage, the country may have a window of opportunity, but prospects for attracting and developing investment remain limited. Reports from the African Development Bank (AfDB) stress that the continent could play a crucial role in diversifying global supply, but warn of the need to ensure local value addition, avoiding a repetition of past extractive models.
Geopolitics of a Strategic Resource
The growing centrality of rare earths has turned them into a first-order geopolitical asset. Competition over their control is part of a broader dynamic of technological and industrial rivalry among major powers. According to the International Energy Agency (IEA), supply concentration in a few countries increases the risk of disruption, while rising demand for clean technologies intensifies pressure on available resources. This has led to a trend of “resource nationalism,” with countries strengthening control over reserves and supply chains.
At the same time, bilateral agreements and strategic partnerships are multiplying, reflecting attempts to secure long-term access. Japan, South Korea, and the EU have been particularly active in diversifying suppliers.
Opportunities and Risks
Despite the enthusiasm, the rare earth market remains marked by structural challenges. Technological complexity, high costs, and environmental concerns continue to limit supply expansion.
In addition, price volatility and dependence on political decisions introduce further uncertainty. For emerging countries such as Mozambique, the challenge will be to transform geological potential into sustainable economic development, avoiding dependency traps and external value capture.
Rare earths have become one of the invisible pillars of the modern economy. More than a growing market, they represent a battleground where economic, technological, and geopolitical interests intersect. In a world in constant transition, control over these chains may determine competitive advantage and the ability to shape the direction of the global economy. And in this chessboard, few resources are as decisive and contested today as rare earths.
Text by Celso Chambisso • Photography: D.R.
