Rare earth elements (REEs)—a family of 17 chemically similar metallic elements—are essential to modern high-technology industries, including clean energy, consumer electronics, and defense and aerospace systems. Despite their name, these elements are not geologically rare. The real complexity lies in the refining and processing stages that transform raw ore into usable materials. Over the past few decades, China has developed an extensive industrial base that dominates these stages, positioning itself at the center of the global rare earth supply chain. This dominance has made rare earths not just a matter of economics, but of global strategic importance.

To understand this, it is necessary to recognize the foundational role of REEs in modern technology. The 15 lanthanides, along with scandium and yttrium, possess unique physical, magnetic, and luminescent properties that make them critical to contemporary applications. The largest single use of REEs is in the production of permanent magnets, which accounted for about 44% of global demand in 2022. These magnets are vital for wind turbines, electric vehicle (EV) motors, and other clean energy systems. They are equally crucial in defense technologies, where REEs enable precision-guided weapons, radar systems, night vision, and communication equipment. The accelerating energy transition, coupled with rapid technological advancement, is expected to nearly triple global demand for magnetic REEs—particularly neodymium (Nd), praseodymium (Pr), dysprosium (Dy), and terbium (Tb)—by 2035.

China’s position in this sector is the result........

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