Rare Earths: Supply Chains, Magnets and Strategic Shifts

Governments and industries are recalibrating strategies as rare earth elements (REEs) move from resource issue to geopolitical fault line.
Analysts warn that recycling and circularity, while important, cannot by themselves displace China's dominant role in mineral processing and magnet production; downstream capacity for alloying, sintering and magnet manufacture remains the decisive choke point.
China’s export-oriented capacity and aggressive industrial policy act as a global “pressure valve,” converting mining output into finished magnets, power electronics and components for EVs and renewables.
That dynamic casts doubt on simple trade statistics, which understate how much added value and control sits downstream in Chinese plants.
Regional responses vary: Korea aspires to build integrated processing hubs, Europe quietly invests in magnet alternatives and recycling, and India experiments with EV designs that minimize REE dependence.
Meanwhile, opportunistic supply sources in places like Myanmar and Africa raise ethical and security questions.
Automakers such as BYD and China’s wider EV surge illustrate how vehicle exports can amplify demand for magnets and control of the technology stack.
Policymakers face a twofold task: accelerate domestic downstream capacity for magnets and power electronics, and craft industrial policies that pair recycling with new manufacturing investment to reduce vulnerability.