China's rare earth leverage sits downstream, not upstream. Its mining share fell to about 69% in 2024, while refining (91%) and magnet manufacturing (94%) remain near-total. Export-license actions from 2023 through 2025 — on gallium, germanium and now rare earth magnets themselves — show China treating that downstream concentration as an adjustable bargaining tool rather than a fixed trade barrier.
How much of the three-tier rare earth supply chain does China control, and why does concentration deepen downstream?
China's grip loosens toward the mine but tightens toward the magnetCITE:E1CITE:E2. In 2024, China accounted for roughly 69% of global rare earth mining — about 270,000 of the world's 390,000 tonnes of rare earth oxide output — according to the U.S. Geological Survey (USGS)CITE:E1. That upstream share is already declining as Myanmar, the United States, Australia and Nigeria expand mine outputCITE:E1. Further down the chain, the concentration reverses direction: the International Energy Agency (IEA) puts China's share of global rare earth refining and separation at about 91%, and its share of rare earth permanent magnet manufacturing at about 94%CITE:E2. The Center for Strategic and International Studies (CSIS) arrives at similar estimates of roughly 90% for refining and 93% for magnetsCITE:E2.
| Supply chain stage | China's share | Source |
|---|
| Mining (rare earth oxide, 2024) | ~69% (270,000 of 390,000 tonnes) | USGSCITE:E1 |
| Refining / separation | ~91% (IEA) / ~90% (CSIS) | IEA/CSISCITE:E2 |
| Magnet manufacturing | ~94% (IEA) / ~93% (CSIS) | IEA/CSISCITE:E2 |
| Primary gallium production | ~99% | USGSCITE:E3 |
How has China turned mineral supply into geopolitical leverage, using gallium and germanium as the template?
China tested its export-control playbook on two smaller critical minerals before extending it to rare earthsCITE:E3. China produces about 99% of the world's primary gallium, a metal used in compound semiconductors, fiber optics and infrared opticsCITE:E3. Beginning in August 2023, China imposed export licensing requirements on gallium and germanium, and in December 2024 it extended that control into a full ban on exports of both metals to the United StatesCITE:E3.
How did the April 2025 export-license rules on rare earth magnets hit EVs, wind power and defense supply chains?
China's Ministry of Commerce (MOFCOM) placed seven medium and heavy rare earths under export licensing on April 4, 2025CITE:E4. The list covers samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium, along with their oxides, metals, and permanent magnets containing these elementsCITE:E4. Because these elements are inputs for high-performance magnets used in electric-vehicle motors, wind turbines and defense platforms such as the F-35, the licensing requirement reaches directly into finished magnet products rather than stopping at raw ore or oxideCITE:E4.
What do the October–November 2025 escalation, extraterritorial rule and suspension reveal about China's rare earth controls?
China escalated the controls in October 2025, then suspended the escalation a month laterCITE:E5. MOFCOM's Notice No. 61 expanded export licensing to cover rare-earth-related technology and services, and introduced an extraterritorial rule requiring a license for foreign-made products containing as little as 0.1% Chinese-origin rare earth content, originally set to take effect in December 2025CITE:E5. In November 2025, China agreed to suspend implementation of that expanded control for one year, in exchange for the U.S. side suspending corresponding measuresCITE:E5. The sequence — a rule announced, widened, then shelved under reciprocal terms — shows the controls functioning as an adjustable bargaining instrument rather than a fixed trade barrierCITE:E5.
Can Western rare earth refining and magnet capacity catch up to China within the next few years?
The most concrete Western countermeasure to date is a single deal with a hard date attachedCITE:E6. In July 2025, the U.S. Department of Defense agreed to buy $400 million of preferred equity in MP Materials, becoming its largest shareholder, and set a price floor of $110 per kilogram for neodymium-praseodymium (NdPr) oxideCITE:E6. The agreement also backs a new "10X" magnet manufacturing facility, targeting production capacity of about 10,000 metric tons per year starting in 2028CITE:E6. That target sits against China's 91% refining share and 94% magnet share, both still in place as of the most recent estimatesCITE:E2CITE:E6.
What this means
The three numbers line up in one direction: mining share falling to 69% while refining (91%) and magnets (94%) stay concentratedCITE:E1CITE:E2. China has repeatedly regulated exactly that downstream layer — gallium and germanium licensing in August 2023 and a full U.S. ban in December 2024CITE:E3, rare earth magnet licensing in April 2025CITE:E4, and a technology-plus-0.1%-content rule in October 2025 that was suspended for one year in November 2025CITE:E5. The one announced Western response with a specific volume and date — MP Materials' 10,000-metric-ton target for 2028, backed by $400 million in DoD preferred equity and a $110/kg price floor — has not yet produced output that can be measured against China's current refining and magnet sharesCITE:E6.