Geopolitics of Rare Earth Minerals: Resource Wars in the Making?
Rare earth minerals are a group of 17 metallic elements in the periodic table made up of scandium, yttrium, and the lanthanides. Although the name suggests ‘rare’ minerals, they are abundant in the earth’s crust. However, they are often found in concentrated form and are difficult and costly to extract there by giving them the name rare minerals. Rare earth is an essential part of industries of mobile phones, computer hard drives, semiconductors, catalytic converters, power steering, defense etc. Moreover, the demand for green technologies and the pressure on developed countries to limit their carbon footprint and rely sustained supplied have resulted in the plunging demand for this rare earth. The rise in EVs due to their zero emission due to the use of lithium-ion batteries as a fuel source have given to solution to countries determining to limit their carbon discharge. The global market for these minerals was USD 3.39 billion in 2023 and is expected to grow to USD 8.14 billion by 2023. Asia Pacific dominates the rare earth market with 61% of mined rare earth coming from China. China’s monopoly over the production of these metals and the rising global dependency on rare earths have made these resources a potential catalyst for geopolitical resource war. The strategic importance of these minerals in global economy have led countries to wage a race to diversify their sourcing and monopolize control over the resource extraction to reduce vulnerability. As a result, scramble for alternative reserves such as in Africa, Latin America and Indo-Pacific have begun which in turn is reshaping global alliance, investment patterns and countries’ engagement thereby raising the stake for political conflicts, economic fragility, and neocolonial imprints over resource ownership.
CHINA’S DOMINANCE IN THE RARE EARTHS
China’s sustained investment across the value chain beginning in the 1980s was a geopolitical move to establish a hegemony over the strategic industry. By offering subsidies, low-cost loans and relaxed environmental regulations it allowed China to effectively drive many competitors who were burdened by stricter standards of processing. With companies heavily dependent ton Chinese processing, it can dictate prices and control downstream access for industrial and defense projects. for Supply chain chokehold of China in this segment has led China to use rare earths as a geoeconomic tool to forwards their national interest. The recent export control of six rare earths by China has affected industries such as EVs in which 90% of the rare earths used in these vehicles comes from China. [i]These moves allow China to leverage more negotiating power and pressurize rival economies like the US, EU, Japan. Moreover, the recent export control in retaliation to Western tariff hikes detonators Beijing capability to use export control as a tool to construct the supply of critical inputs, drive global prices and make countries as at the mercy of China. Beijing’s gambling on its resource endowment is being balanced on thin ice. China’s chokehold over these strategic resources have made countries apprehensive of China exploiting their strategic vulnerabilities thereby inducing them to look for diversification of supply chain.
AFRICA’s RARE EARTH VOLATILITY
While China continues to hold a monopoly in rare earth, its growing import dependency in the rare earth permanent magnets (REPMs) which is an essential unit in EVs and wind turbines has turned the cards in favor other regions such as Africa. Potential mines in Tanzania, Angola, Malawi and South Africa are expected to be operation by 2029 contributing 9% of global supply of rare earths.[ii] Tanzania alone is expected to account for 10% of China’s imported rare earths in 2029.iii However the dominance of China on African rare earth is not absolute. China through its extensive BRI investment which have allocated $8 billion - $10 billion towards critical mineral projects have resulted in China securing dominant position in critical mineral reserves as the Tengu Fungurume Mine which accounts for 12% of cobalt production.[iii] The advanced processing technology thar China holds have resulted Africa to be highly dependent on Chinese technology reducing the region to once again an importer of raw materials and exporter of finished goods. Only 37% of Africa’s rare earth ores are set to imported to China by 2029, thereby potentially leaving most of the room fir Western actors.iii It is evident as companies from Canada. UK, Australia have already started investing in projects across Malawi, Namibia, Angola, and South Africa reflecting diversification attempt by countries dependent on China for rare earths to de-risk the vulnerable supply chain. However, this intense competition for resources have triggered mineral diplomacy as evident by the DRC’S offering the US an exclusive access to its vast reserves of cobalt, lithium, copper and coltan in exchange for security assistance to repel the M23 insurgency supported by Rwanda in the eastern territories.[iv] DRC which holds over 70% of the cobalt reserves illustrates how competition for resources can become entangled with armed conflict and foreign intervention. This militarization of resource politics has increased violence in the resource rich areas in eastern DRC, further complicating the fragile political economy of the nation. The convergence of foreign intervention, armed groups and third party such as Rwanda in this case have not only undermined the central authority but also diverted resources away from public development and uplifting the 73.5% of Congolese people living on less than $2.15 a day.[v]
LATIN AMERICA’S EMERGING RARE EARTH MARKET
Another region of significance in this resource war have been Latin America, home to over 60% of the world’s lithium and 40% of world’s copper has become another strategic location for the scramble for rare earths.[vi]viii As demand for green energies surged the region experienced a transition from a traditional supplier of commodity to a battleground where great powers interact. China over the years have placed itself as a dominant player by channeling billion into mining operations, midstream processing infrastructure and agreements in the ‘Lithium Trainagle’ (Chile, Argentina, Bolivia) and Brazil’s rare earth. As Latin American states lacks domestic processing capacity compared to China, it has enabled China to shape global pricing, maintain technological superiority and deepen dependencies of these states. In response to the growing Chinese presence and the need to diversify the rare earth market the US and its allied have increased their expansion in the region using key frameworks such as the Minerals Security Partnership and sustainable mining investments to secure critical inputs for sectors such as defense and tech. However, it is to be noted that Latin America is no longer a passive receiver of foreign expansionism but it is increasingly being active in renegotiating its position in the global order. Governments are asserting greater state involvement pushing state private partnerships and investing in domestic processing , as evident by Chile’s Codelco-SQM lithium venture and Brazil‘s $815 million pump into rare earths and battery materials.[vii] Meanwhile Brazil’s export of rare earth minerals to China in the first half of 2025 have tripled the full year total from 2024, thereby questioning the sustainability of the dependence highlighting the regions structural vulnerabilities, weak refining capacity and dependence on rare earth exports. While trade between China and Brazil surged, US- Brazil relations have worsened signaling risky strategic dependency.
INDO PACIFIC ALIGNMENT AND REALIGNMENT DUE TO CRITICAL MINERALS
The strategic importance of rare earths in daily technology of 21st century has created a profound geopolitical shift in Indo Pacific, home to critical mineral reserves and emerging processing hubs. China continues to weaponize its near monopoly over this sector by establishing a carrot and stick policy. Cooperative countries such as Malaysia have been offered rare earth separation technology, a calculated move by Beijing to control the resource rich country while using its economic diplomacy blending industrial cooperation with geostrategic outreach.[viii] However with countries such as India and Japan it uses a stick policy. The April 2025 export curbs on critical rare earths like samarium, scandium, dysprosium halting supplies to vital manufacturing and defense industries of Japan and India. In case of India the curb has heavily impacted the auto makers with risk of facing production disruptions in August 2025 if alternatives are not sought. [ix] China’s coercive practices and its monopoly over the rare earth sector have resulted in strategic decisions within the QUAD members. The July 2025 launch of the Quad Critical Minerals Initiative aims to pool investments, standardize extraction and finance projects in rare earths productions.[x] Its ambition is twofold: to build a supply chain independent of China and invest in public private partnership in resource extraction. Although efforts such as these aims to show that there is a growing possibility of reducing Chinese monopoly over the rare earths section, countries such as Malaysia, Vietnam and Thailand possess significant deposits but are dependent on China for technology. As a result, even though it seems as if Beijing is losing its grip, there is a misleading perception of its waning influence.
However, with individual countries resorting to domestic production of rare earths it is also leading to hardline resource nationalism. Indian with around 8% of global rare earth reserves, through its National Critical Mineral Mission and export restrictions sends a signal that it aims to prioritize domestic value addition over raw material exports. [xi]Through investing abroad such the January 2024 lithium mining deal with Argentina, India is paving the way to transition from a passive supplier to an active participant in the global mineral value chain. [xii]
CONCLUSION
While attempts to diversify China’s monopoly over the rare earth market shows progress across these regions, China’s entrenched position formulated through years of strategic manoeuvring ensures it remains central to the rare earth ecosystem. In all the three regions these dynamics are leading to different power alignment, engagement, and vulnerabilities. As a result, rather than conventional war for resources the world is witnessing a struggle for control over supply chain, technological supremacy and strategic influence over resource rich regions and the people involved with it.
Endnotes:
[i] “Rare Earths Are Not Rare: Chinese Move Can Backfire.” The Economic Times. Accessed July 26, 2025. https://economictimes.indiatimes.com/news/international/global-trends/rare-earths-magnet-minerals-are-not-rare-chinese-move-can-backfire-while-automobile-production-faces-threat-amid-china-export-curbs/articleshow/121749665.cms?from=mdr.
[ii] “Rise of African Rare Earths Bolsters Supply Pipeline for China and the West.” Benchmark Source, June 24, 2024. https://source.benchmarkminerals.com/article/rise-of-african-rare-earths-bolsters-supply-pipeline-for-china-and-the-west.
[iii] McNeal, Dewardric L. “Op-Ed: U.S. Is Losing Rare Earth Metals War to China, and Running out of Time to Win It Back.” CNBC, June 29, 2025. https://www.cnbc.com/2025/06/29/us-china-rare-earth-minerals-metals-geopolitics-power.html.
[iv] Lawal, Shola. “Why Does DRC Want a Ukraine-like Minerals Deal with Trump, amid Conflict?” Al Jazeera, March 17, 2025. https://www.aljazeera.com/news/2025/3/17/amid-conflict-why-does-the-drc-want-a-minerals-deal-with-trump.
[v] “Overview.” World Bank. Accessed July 28, 2025. https://www.worldbank.org/en/country/drc/overview.
[vi] “How Can Latin America Stay Ahead of Its Copper Market Competitors? - Mine: Issue 154: July 2025.” Mine, July 8, 2025. https://mine.h5mag.com/mine_jul25/latin-america-copper-2025.
[vii] Monteiro, Thomas. “Latin America: The New Battleground for Critical Minerals.” Global Finance Magazine, March 17, 2025. https://gfmag.com/economics-policy-regulation/latin-america-critical-minerals/.
[viii] Rare earth, raw power: How China plays the Carrot and stick game of the century – the diplomat. Accessed July 31, 2025. https://thediplomat.com/2025/06/rare-earth-raw-power-how-china-plays-the-carrot-and-stick-game-of-the-century/.
[ix] Keshri, Gyanendra. “Rare Earth Crisis: China’s Export Curb Exposes India’s Dependence.” Deccan Herald. Accessed July 30, 2025. https://www.deccanherald.com/india/chinas-rare-earth-magnets-export-curb-exposes-indias-vulnerabilities-3618163.
[x] “Australia, India, Japan, US Declare Economic War on China’s Rare Earth Empire.” The Economic Times. Accessed July 30, 2025. https://economictimes.indiatimes.com/news/economy/foreign-trade/australia-india-japan-us-declare-economic-war-on-chinas-rare-earth-empire/articleshow/123001867.cms?from=mdr.
[xi] Exclusive: India moves to conserve its rare earths, seeks halt to Japan exports, sources say | Reuters. Accessed July 31, 2025. https://www.reuters.com/world/india/india-moves-conserve-its-rare-earths-seeks-halt-japan-exports-sources-say-2025-06-13/.
[xii] “India and Argentina Sign Agreement for Exploration and Mining of 5 Lithium Blocks in Argentina’s Catamarca Province.” Ministry of Mines, Government of India, home, January 15, 2024. https://mines.gov.in/webportal/newsdetail/india-and-argentina-sign-agreement-for-exploration-and-mining-of-5-lithium-blocks-in-argentinas-catamarca-province.
