Resource weaponization—the strategic use of a country’s control over critical resources to influence global supply chains, demand trends, and pricing—has become a cornerstone of trade conflicts, enabling major powers to pressure rivals and assert their dominance in the global economy.

Rare earth metals are at the forefront of this competition, serving as a linchpin for the future of diverse industries. From construction and electronics to electric vehicles, renewable energy systems, batteries, and military hardware, these materials play an essential role in driving economic and technological advancements worldwide.

Rare Earth Metals: What They Are and Where They’re Found

Rare earth metals consist of a group of 17 chemical elements in the periodic table: yttrium (Y), scandium (Sc), lutetium (Lu), ytterbium (Yb), thulium (Tm), erbium (Er), holmium (Ho), dysprosium (Dy), terbium (Tb), gadolinium (Gd), europium (Eu), samarium (Sm), promethium (Pm), neodymium (Nd), praseodymium (Pr), cerium (Ce), and lanthanum (La). These elements are distinct from precious metals like gold, silver, platinum, and palladium, as well as from abundant base metals such as iron, copper, nickel, aluminum, zinc, lead, tin, and titanium.

Rare earths are critical to advanced industries, powering the production of satellites, lasers, cameras, telescope lenses, smartphones, flat-screen TVs, electric vehicles, and aircraft turbines. They are also essential for clean energy technologies like wind turbines and solar panels, as well as advanced military systems, including weaponry, drones, robotics, missiles, and spacecraft. Additionally, they underpin cutting-edge innovations such as quantum computing, 5G networks, and electric vehicle batteries.

China dominates the global supply, holding 48.8% of the world’s rare earth reserves, totaling 44 million tons as of 2024, far surpassing its closest competitor, the United States, which accounts for just 2.1% with 1.9 million tons. This distribution is illustrated in figure 1:

Figure 1: Distribution of rare earth reserves across the globe (in million tons)

Source: United States Geological Survey, Mineral Commodity Summaries 2025

In addition to securing nearly half of the world’s rare earth reserves, China holds substantial market shares in the processing of key minerals: 23.9% of nickel, 58% of lithium, 42.3% of copper, 70% of cobalt, and 93% of manganese. It also maintains a complete monopoly over the production of dysprosium and graphite, according to the International Renewable Energy Agency. Furthermore, Beijing dominates approximately 69% of global rare earth production, totaling 390,000 tons in 2024, as shown in figure 2.

Figure 2: Global distribution of rare earth production (in thousand tons)

Source: United States Geological Survey, Mineral Commodity Summaries 2025

On the other hand, China processes approximately 90% of the world’s rare earth metals, leveraging its relatively low manufacturing costs and advanced technological capabilities in this industry. By importing raw rare earth materials from other countries and refining them, China significantly strengthens its global dominance in this critical sector.

China’s Grip on Rare Earth Metals: Scope and Limits of Its Dominance

China’s grip on rare earth mineral supply chains stems from decades of sustained government efforts, characterized by massive investments in the sector, stringent export controls, and the strategic use of low-cost labor and lenient environmental regulations to gain a competitive edge in the global market. Additionally, China has secured mining contracts in resource-rich countries to extract, process, and export these minerals worldwide. The key aspects of China’s dominance over rare earths can be outlined as follows:

1. Robust Government Support: China’s backing of its rare earth industry dates back to the mid-1980s, when authorities introduced tax exemptions on rare earth exports, significantly reducing costs for domestic mining companies. Foreign firms were barred from mining activities within China and faced restrictions on participating in rare earth processing projects unless partnered with local entities and approved by the government, allowing China to absorb foreign expertise through these collaborations. 

Between 2010 and 2011, China implemented a strategic overhaul of its rare earth sector, focusing on controlling mining and processing capacities, tightening export regulations, consolidating the industry into a few major players, enhancing technological and environmental standards, and fostering innovation in rare earth technologies.

2. Expanding Influence in Africa and Latin America’s Mining Sectors: China is a leading player in Africa’s mining sector, deeply engaged in the extraction, refining, and production of rare earths. Over the past five years (2019–2023), Chinese ownership of African mines has grown by 21%. Chinese companies dominate mining operations in mineral-rich countries like the Democratic Republic of Congo, Zambia, and Zimbabwe, controlling approximately 72% of cobalt and copper mines in Congo, including the Tenke Fungurume Mining, which alone accounts for about 12% of global cobalt production. In Latin America, China has poured significant investments into the Lithium Triangle (Chile, Argentina, and Bolivia), which holds roughly 75% of the world’s lithium reserves. State-owned Chinese companies have also invested heavily in copper and zinc markets in Colombia and copper mines in Peru, with extracted minerals shipped directly to China.

3. Imposing Export Controls: On multiple occasions, China has threatened to weaponize rare earth minerals to counter political and economic pressures from other countries. In 2010, it suspended rare earth exports to Japan in response to a collision between a Chinese fishing vessel and two Japanese coast guard ships, which led to the detention of the Chinese captain by Japanese authorities. The tactic resurfaced in 2019 when Beijing hinted at cutting off rare earth supplies to the United States during their trade war, capitalizing on Washington’s heavy reliance on Chinese mineral imports. Between 2023 and 2024, China began incrementally imposing restrictions on strategic material exports to safeguard national security and counter escalating US efforts to curb China’s technological advancements.

In December 2024, China banned the export of antimony, gallium, and germanium to the United States—three critical minerals essential for a wide range of advanced technology sectors. In the latest chapter of the US-China trade war, on April 15, China imposed export restrictions on seven rare earth elements: samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium. These controls require exporters to obtain licenses for each rare earth shipment, a process that can take up to 45 days.

US Counterstrategies to Reduce Reliance on China

The United States has adopted a comprehensive, multifaceted approach to lessen its dependence on China for critical minerals, recognizing their strategic importance in ensuring a stable and diversified supply. A cornerstone of this strategy is boosting domestic production of vital minerals by opening new mines, advancing mining technologies, and promoting innovation in resource extraction. Additionally, the United States is prioritizing the diversification of its supply chains by strengthening alliances with partners such as Australia, Canada, and several European countries. In 2022, it launched the Minerals Security Partnership in collaboration with Australia, Canada, Estonia, Finland, France, Germany, India, Italy, Japan, Norway, South Korea, Sweden, the United Kingdom, and the European Union, towards diversifying supply chains and stimulating public and private investment in critical minerals, including lithium, cobalt, nickel, manganese, graphite, and rare earth elements.

In February 2021, former US president Joe Biden signed Executive Order 14017, aimed at reviewing vulnerabilities in domestic supply chains for rare earths and other critical raw materials. The Department of Defense was directed to designate at least five minerals—lithium, cobalt, graphite, nickel, and manganese—as essential to national security under the Defense Production Act (DPA), with the goal of localizing the electric vehicle battery industry. Furthermore, Biden signed several laws to enhance domestic production and mineral processing, including the Inflation Reduction Act, the Infrastructure Investment and Jobs Act, and the CHIPS and Science Act.

In the most recent steps to challenge China’s control over rare earth minerals, Trump signed an executive order on February 14, establishing the National Energy Dominance Council to coordinate energy policies across federal agencies. This Council aims to position the United States as a global leader in the energy sector and reduce reliance on imports by leveraging domestic natural resources such as oil, natural gas, uranium, coal, and critical minerals. Additionally, on March 20, Trump issued another executive order outlining immediate measures to boost US mineral production. These include directing the Secretary of the Interior to compile a list of all federal lands containing mineral deposits and reserves, tasking the President and Chair of the Export-Import Bank to issue guidelines on using project financing tools to support domestic mineral production, and instructing the Secretaries of Defense, Interior, Agriculture, and Energy to identify as many federally managed lands as possible suitable for developing and operating commercial mineral production projects.

Furthermore, on April 15, Trump signed an executive order launching an investigation into national security risks stemming from the United States’ dependence on imported critical minerals. This investigation will assess vulnerabilities in mineral supply chains, evaluate potential commercial solutions to ensure secure and sustainable domestic supplies, and provide recommendations to enhance local production, reduce reliance on foreign suppliers, and strengthen national economic security.

Additionally, on April 24, Trump issued an executive order to develop domestic capabilities for exploring, extracting, and processing seabed mineral resources. This includes streamlining permitting processes without compromising environmental standards, supporting investment in deep-sea sciences and mapping, and enhancing coordination among executive departments and agencies regarding seabed-mining activities. The order also seeks to establish the United States as a global leader in seabed mineral exploration, build a robust domestic supply chain for critical minerals derived from seabed resources, and foster cooperation with US allies to counter China’s growing influence over seabed mineral resources.

Consequences of China’s Dominance over Rare Earth Minerals

Given China’s pivotal role in rare earth mineral supply chains, driven by its dominance in global production and its capacity to process and refine these minerals, its weaponization of these resources in its trade war with the United States is likely to have significant global repercussions, which can be outlined as follows:

1. Harm to US Technological and Defense Industries: The United States depends on imports for 80% of its rare earth mineral requirements, with roughly 56% supplied by China. For yttrium, the United States is entirely (100%) reliant on imports, with approximately 93% sourced from China between 2020 and 2023, per data from the US Geological Survey. Consequently, any curbs on Chinese rare earth exports could disrupt US industries dependent on these minerals, such as automotive manufacturing, technology sectors producing smartphones and chips, and defense industries. For example, manufacturing an F-35 fighter jet requires over 900 pounds of rare earth elements, an Arleigh Burke DDG-5 destroyer needs approximately 5,200 pounds, and a Virginia-class submarine uses around 9,200 pounds of these materials.

2. Disrupting Europe’s Energy Transition Plans: The economies of the European Union are among the most vulnerable to disruptions in rare earth mineral supply chains due to their heavy reliance on imports and limited capabilities in extraction, mining, and processing. Consequently, restrictions on Chinese rare earth exports could significantly impact EU countries. In 2023, 94% of the EU’s rare earth imports came collectively from China, Malaysia, and Russia, as illustrated in the figure 3.

Figure 3: Distribution of EU Rare Earth Imports (%)

Source: Eurostat, International trade in critical raw materials

Moreover, Europe’s plans to transition to clean energy and reduce greenhouse gas emissions face a critical turning point due to the vital role of rare earth minerals in manufacturing clean energy equipment and technologies, particularly those related to solar and wind power. Specific rare earth elements, notably neodymium and dysprosium, are essential for producing solar panels and wind turbines. The International Renewable Energy Agency (IRENA) predicts that the energy transition will become a primary driver of demand for rare earth minerals.

3. Disruption of the Electric Vehicle Sector: Minerals form the backbone of battery and electric vehicle (EV) production, with a single electric vehicle requiring over 200 kilograms of copper, lithium, nickel, manganese, cobalt, graphite, and rare earth elements combined, as shown in figure 4.

Figure 4: Minerals Used in Electric Vehicles (kg per vehicle)

Source: IEA, Minerals used in electric cars compared to conventional cars

Consequently, Chinese export restrictions on rare earth minerals are likely to cause significant disruptions in the electric vehicle industry, affecting production volumes. This will lead to delays in EV deliveries, exacerbating challenges in the EV supply chain and slowing sales momentum.

4. Strengthening Efforts to Diversify Rare Earth Supply Chains: The weaponization of rare earth minerals is driving countries to reduce their reliance on a single source for these critical resources and seek ways to break China’s stranglehold on this vital sector for numerous industries. As a result of the US-China competition over essential minerals, many countries are reassessing their supply strategies. Major economies, including the European Union, are working to secure alternative supply chains, bolster domestic industrial capabilities, and decrease dependence on China. These countries are also enhancing international cooperation to mitigate the risks posed by China’s dominance amid geopolitical challenges.

Egypt and the Race for Rare Earth Dominance

Egypt is neither a major global importer nor exporter of rare earth elements, but it could be indirectly affected by China’s restrictions on these minerals, which are likely to disrupt global and local technology industry supply chains. Consequently, the operations of foreign companies in Egypt’s smartphone manufacturing sector, such as Samsung, Oppo, Xiaomi, and Vivo, may face challenges due to shortages of raw materials essential for phone production.

However, these circumstances present several opportunities for Egypt. The country could capitalize on its abundant phosphate resources and its status as a leading global producer. Recent studies indicate that waste from phosphate mining and industrial processing could serve as a potential source of rare earth elements, adding significant economic value to Egypt’s phosphate industry. As a result, global geopolitical shifts in the rare earth market may encourage Egypt to invest in capabilities for mining and processing rare earth elements derived from phosphate waste.

Concluding Remarks

• Rare earth minerals have become a critical component in the equation of international competition unfolding today between the world’s two largest economies. China has effectively leveraged its resource dominance as a pressure tactic in its trade war with the United States by restricting exports of select rare earth minerals.
• The adverse consequences of China’s decision will not only impact the US economy but will also reverberate across the global economy, given the reliance of many countries on China to meet their rare earth mineral needs.
• Numerous global industries will be affected by China’s restrictions on rare earth exports, particularly electronics, electric vehicles, renewable energy technologies, batteries, and military equipment and weaponry.
• China itself may face repercussions from repeatedly exploiting its dominance over rare earths. These export restrictions are prompting many countries to seek alternatives to China, enhance domestic production, rebuild local supply chains, and pursue collaborative approaches with allied countries to support rare earth projects, gradually undermining China’s grip on the sector.
• Despite the challenges that may confront investments in electronics and smartphone manufacturing in Egypt, an opportunity could emerge for the Egyptian economy through the potential exploitation of its phosphate wealth, as studies suggest the possibility of extracting rare earth elements from phosphate waste.