From the colonial mines of Burma to the industrial hubs of Inner Mongolia, China’s dominance over rare earths has transformed these once-obscure metals into tools of geopolitical influence, reshaping global trade, military strategy, and the very architecture of technological power!
Who truly commands the foundations of the twenty-first-century economy? Which states possess the leverage to dictate the supply of critical minerals that underpin modern defence systems, renewable energy technologies, and digital infrastructure? How did a single nation come to dominate a market indispensable to the West’s industrial and military ambitions?
The story begins in Burma, a region historically endowed with rich deposits of tin, tungsten, and rare earths. During the colonial era, British, and later Japanese, interests exploited these resources, extracting wealth with scant regard for local populations or ecological degradation. Historical accounts indicate that tungsten extraction during the Second World War directly financed Japan’s war machine, illustrating how control over strategic minerals could translate into military advantage. Even in those early decades, however, the extraction and transport of such metals were fraught with geopolitical complexities: jungle warfare, fragile rail networks, and local resistance ensured that mineral wealth was rarely fully harnessed, leaving a template of exploitation and global competition that would resonate across subsequent decades.
Rare earth elements (REEs) — a group of seventeen metals including neodymium, dysprosium, and praseodymium — are deceptively named, yet indispensable in the manufacture of permanent magnets, smartphones, electric vehicles, and fighter jets. Despite over a decade of Western efforts to loosen China’s grip, Beijing remains preeminent. Chinese President Xi Jinping’s 2019 visit to a rare earth magnet factory in Jiangxi Province was widely interpreted by the Washington Post as “muscle flexing,” a deliberate reminder to Washington of its dependency on Beijing for these critical materials.
China’s strategic foresight traces back to Deng Xiaoping’s 1992 observation in Baotou, Inner Mongolia: “The Middle East has oil, China has rare earths.” Deng’s statement proved prescient, foreshadowing the creation of a meticulously orchestrated industrial ecosystem encompassing mining, separation, refining, and magnet production. By consolidating thousands of small-scale mines and vertically integrating the value chain, China transformed raw mineral wealth into a geopolitical lever. As Xigang Zhang, chief of Rising Nonferrous Metals Share Co, affirmed to the Financial Times, “International markets will remain dependent on China’s rare earth supply chain for the foreseeable future.”
This concentration of power has forced the West into a reactive scramble. The United States, for instance, possesses only one active rare earth mine, Mountain Pass in California, which extracts neodymium and praseodymium but remains heavily reliant on China for processing. As the Financial Times observed, the Pentagon’s $400 million direct investment in MP Materials to build a domestic magnet manufacturing facility represents a rare and decisive intervention, intended to “accelerate American supply chain independence.” Yet even such measures confront formidable technological and economic barriers, as China dominates not merely extraction but also downstream processing and magnet production, controlling 70 per cent of mining, 90 per cent of separation and processing, and 93 per cent of global magnet manufacturing.
Western powers have pursued alternative sources in unconventional geographies. Greenland, home to some of the largest untapped rare earth deposits, has attracted US interest under the Trump administration. According to the Washington Post, the proposed Tanbreez mine in southwestern Greenland would extract tantalum, niobium, zirconium, and REEs from a remote fjord, necessitating a floating deepwater port, worker housing, and substantial energy infrastructure. Tony Sage, CEO of Critical Metals Corp, told the Washington Post that President Trump’s aim was not the acquisition of Greenland itself, but “favoured access to mining deals that benefit US manufacturers and defence contractors.”
The United States has also sought to exploit domestic waste streams as a source of critical minerals. A 2025 study from the Colorado School of Mines, concluded that “recovering even small quantities of the byproducts from existing mining operations would substantially reduce net import reliance for most critical minerals.” For fifteen elements — including rare earths, gallium, and germanium — recovering less than one per cent of potential byproducts could supplant imports, highlighting a largely untapped domestic reservoir. Translating these findings into economically viable operations, however, remains a formidable challenge, requiring “a lot more research, development and policy.”
China has leveraged its rare earth dominance as a potent geopolitical instrument. In April 2023, Beijing temporarily restricted exports of seven rare earth elements, disrupting US and Japanese supply chains, widely interpreted as a response to American tariffs. Gracelin Baskaran, a critical minerals expert at the Center for Strategic and International Studies, explained that China “doesn’t turn around and curb production to raise prices — rather, it uses market dominance to retain leverage and weaponise these resources.” Such measures confirm that rare earths are neither mere commodities nor traditional resources, but instruments capable of reshaping alliances, supply networks, and international trade norms.
Western responses have been uneven. The US has invested in Pentagon-backed projects, imposed tariffs, and explored international partnerships, while the EU and Japan pursue recycling, stockpiling, and domestic development. The G7, in its 2025 Critical Minerals Action Plan, emphasised diversification, traceability, sustainable mining, and innovation, explicitly recognising the threat posed by “non-market policies and practices in the critical minerals sector,” according to the official communiqué. Yet, as Gareth Hatch, founder of Technology Materials Research, observed, “The mantra of most western companies has always been ‘lowest cost at any cost.’ Why would you buy from a higher-cost producer if lower-cost alternatives are available?”
Attempts to replicate China’s industrial mastery confront both technological and historical inertia. Bloomberg reported that the solvent extraction process crucial to rare earth separation, though originally developed in the United States, was abandoned domestically due to environmental and regulatory constraints, permitting Chinese engineers to perfect the technique over decades. Between 1950 and 2018, China filed over 25,000 rare earth patents, surpassing US filings by more than 150 per cent. Biological and green-tech alternatives, such as the DARPA-funded EMBER project using microbes to process REEs, remain years from industrial scalability, according to the Washington Post.
Even as the US pursues Greenland and domestic mining initiatives, China has consolidated its control over rare earths through new licensing and reporting regulations, centralising oversight under the ostensible guise of environmental protection, the Washington Post reported in 2025. This underscores a stark paradox: abundance alone does not confer strategic autonomy. True leverage resides in control over processing, technology, and supply chain governance, areas where China has invested systematically and consolidated expertise.
Rare earths have become instruments of influence at the intersection of technology, commerce, and military power. As the Financial Times observed, “breaking China’s grip will be challenging,” given decades of state planning, technological mastery, and market manipulation. Even US interventions — from price floors to G7 initiatives —
confront the scale and sophistication of China’s advantage.
From Greenland to Mountain Pass, and from Pentagon investments in MP Materials to US-Japan stockpiling, the global race illustrates a critical lesson: in the era of rare earths, mineral supply chains are inseparable from statecraft, and technological command is synonymous with geopolitical power. It is in this context that Trump wages his tariff war, while Xi Jinping and Narendra Modi are set to meet on Monday, 1 September, after seven years, a meeting that could reshape strategic alignments in the rare minerals race.
The writer is Columnist based in Colombo
