The world reorders its minerals: rare earths at the close of 2025

Over the past twelve months, rare earths have moved from the margins of industrial planning to the centre of strategic thinking. What unfolded was not a single dramatic shock, but a sequence of calibrated moves: export licences tightened and loosened, strategic reserves expanded, mining projects reframed as security assets, and supply chains increasingly discussed in the language of geopolitics rather than efficiency.

China remained the gravitational centre of this system. The United States tried to narrow the gap. Europe hesitated, recalculated, and began to hedge. Meanwhile, Africa, Latin America and parts of Eastern Europe quietly became arenas of competition whose outcomes will shape the next decade of technological manufacturing.

China’s leverage: not scarcity, but control

Much of the global discussion still begins with a misconception: rare earths are not especially rare. What is rare is the industrial capability to process them at scale, to separate, refine and transform them into magnets, alloys and components essential for electric vehicles, wind turbines, semiconductors and advanced weapons systems.

China controls the overwhelming majority of global rare earth processing capacity and an even higher share of permanent magnet production, according to international energy and industry assessments published over the past year. This structural dominance remained largely intact throughout 2025.

What changed this year was the way Beijing chose to exercise that power, a shift that unfolded against the backdrop of expanding US sanctions and technology export controls. This suggested a calibrated response rather than an attempt to disrupt global supply chains outright. Rather than triggering a full-scale rupture, Beijing appeared to test the limits of its leverage, signalling capability and intent without provoking systemic collapse.

Following a series of export controls introduced earlier in the year, particularly on permanent magnets and dual-use materials, China began to adjust its export regime. A streamlined licensing system was introduced for selected exporters. In December 2025, Reuters reported that Chinese producer Ningbo Jintian Copper had obtained a simplified, one-year export licence for rare earth magnet products. Under the same framework, general licences were also granted to companies such as JL Mag Rare Earth, Ningbo Yunsheng and Beijing Zhongke San Huan High-Tech. Together, these moves signalled a partial stabilisation of a system that had deliberately been made opaque months earlier.

The effect was immediate. Chinese rare earth exports rose markedly in the final months of the year, underlining a key reality frequently highlighted in market reporting: China is willing to keep global supply chains running, but only under conditions it controls. This pattern has been repeatedly documented in Reuters reporting throughout 2025, particularly in coverage of export controls, licensing mechanisms and downstream impacts on manufacturing.

For producers, the message is clear. A disruption does not need to be total to be damaging. Even modest delays in magnet deliveries can ripple through production schedules for electric motors, robotics, aerospace components and precision electronics.

Furthermore, for electronics manufacturers and EMS providers, these ripples are felt particularly acutely. Permanent magnets and rare earth-based components are deeply embedded in motor assemblies, sensors, power electronics and automation equipment, often sourced through multi-tier supplier networks with limited visibility beyond the first or second tier. In such an environment, even minor regulatory shifts upstream can ripple downstream, resulting in delayed deliveries, supplier changes or forced redesigns. The industry is already under pressure to shorten lead times and localise production.

The United States: narrowing the gap, one bottleneck at a time

In the United States, 2025 was marked by a growing sense of realism. Policymakers no longer spoke of decoupling in absolute terms, but of resilience, redundancy and selective independence.

Washington continued to support domestic mining and processing projects, but the more telling developments emerged around strategic materials where vulnerabilities had become impossible to ignore. One such case was yttrium – a lesser-known rare earth element used in high-temperature alloys, energy systems and defence applications. The expansion of national yttrium reserves reflected a broader shift in U.S. thinking, highlighted in industry reporting and policy briefings throughout 2025: future shortages are likely to be specific, not general.

The situation with lithium followed a similar logic. Although not a rare earth, it is inseparable from the same geopolitical calculus. Support for domestic lithium projects underscored Washington’s determination to secure battery supply chains at home, where possible.

While the United States may narrow the gap with China in certain segments, catching up fully would take many years and sustained political commitment. For manufacturers, this means a prolonged transition period: a world in which alternative supply chains are being built, but Chinese materials remain deeply embedded in the system.

Europe: strategic awareness without strategic comfort

Europe entered 2025 acutely aware of its exposure. It exited the year with greater clarity, but still without a definitive solution.

Throughout the year, European leaders sought to balance two competing imperatives: reducing dependence on Chinese supply chains while preserving economic relations with China, particularly in the automotive and industrial sectors. This tension was visible in diplomatic exchanges and repeated calls for closer cooperation on strategic materials.

At the policy level, new strategies aimed at reducing reliance on foreign suppliers gained traction, alongside intensified discussions on domestic refining, recycling and strategic partnerships.

Yet progress remained cautious. Europe’s challenge is not geological scarcity but social, regulatory and political complexity. New mining projects face public resistance, environmental scrutiny and long permitting timelines.

Serbia became a symbol of this dilemma. The country holds one of Europe’s most significant lithium deposits, a potential cornerstone for the continent’s battery ambitions. Yet political opposition and environmental concerns have repeatedly delayed development. As a result, Serbia’s lithium remains more a strategic possibility than an industrial reality.

For Europe’s electronics manufacturers, this uncertainty translates into continued reliance on external suppliers — precisely the vulnerability policymakers claim they want to reduce.

China in Africa: influence without headlines

If Europe struggles with internal constraints, China has taken a different approach abroad, particularly in Africa.

The continent holds vast reserves of critical minerals, including cobalt, lithium, graphite and rare earth elements. Over the past decade, Chinese companies have steadily expanded their presence through equity stakes, long-term offtake agreements and infrastructure-linked investments, a pattern widely documented by industry analysts and international policy institutes. Similar dynamics have also been outlined in Reuters reporting on China’s growing role in African critical mineral supply chains, particularly in relation to upstream project financing and long-term access agreements.

In the Democratic Republic of Congo, which dominates global cobalt production, Chinese firms play a central role across the industrial mining sector. Efforts to improve traceability and transparency in artisanal mining marked a symbolic step forward, but they did not fundamentally alter the balance of influence.

Beyond cobalt, Chinese companies have acquired stakes in rare earth projects in several African countries, including Tanzania, Burundi and Madagascar, extending their reach across the upstream segment of the supply chain. The advantage lies not only in access to resources, but in speed, financing and a willingness to operate in higher-risk environments.

For global manufacturers, control over upstream assets translates into leverage downstream, especially when combined with China’s dominance in processing and magnet manufacturing.

Latin America: lithium and the next battleground

While rare earths dominate headlines, lithium has become the strategic bridge between energy transition narratives and hard industrial realities. South America holds some of the world’s largest lithium reserves, making the region a focal point of global competition.

Throughout 2025, interest from both Chinese and Western companies intensified. For China, lithium investments complement its dominance in battery manufacturing. For the United States and its allies, Latin America represents an opportunity to diversify supply chains without relying solely on domestic projects.

Yet political risk remains high, as repeatedly noted in industry analyses and regional market reports. Resource nationalism, shifting regulatory regimes and environmental concerns complicate long-term planning. As with rare earths, access to lithium is increasingly shaped by politics as much as geology.

For battery producers and electric vehicle manufacturers, this reinforces a central lesson of 2025: securing supply is no longer just about cost efficiency. It is about jurisdiction, governance and geopolitical alignment.

What 2025 revealed and what 2026 may test

Looking back, 2025 was not a year of dramatic breakdowns. Factories kept running. Electric vehicle production continued. Wind turbines were installed. But the year exposed the structural fragility beneath this apparent normality.

Three conclusions stand out.

First, control outweighs abundance. Rare earths and critical minerals exist in many places, but industrial control, especially over processing, remains highly concentrated. China understands this better than anyone else.

Second, diversification is real but uneven. The United States made tangible progress. Europe moved more cautiously. Africa and Latin America became increasingly central, but largely on terms shaped by external powers.

Third, future shocks will be granular. The yttrium episode of 2025 is instructive. The next disruption may not involve rare earths as a category, but a single element embedded deep in a specific technology.

As 2026 approaches, the global technology sector faces an uncomfortable reality. The transition to electrification, automation and advanced defence systems depends on materials that are small in volume but immense in strategic significance.

If 2025 taught us anything, it is that the age of invisible materials is over. Rare earths and critical minerals have become visible – and in that visibility lies both risk and opportunity.