Rare earth elements might sound niche, but they're everywhere. From your smartphone to electric car motors, even missile guidance systems — these critical minerals power modern life. Thing is, one country calls the shots on almost all of them: China. And that's making a lot of nations, including Australia, pretty nervous.

China's Unrivalled Dominance

China isn't just a big player; it's the dominant force across the rare earth supply chain. Goldman Sachs estimates Beijing controls a staggering 69% of rare earth mining, 92% of refining, and a massive 98% of magnet manufacturing globally. That's a serious chokehold on materials the US government now labels "essential for national security and economic resilience."

These elements, scattered thinly through the earth's crust, are indispensable. They help make the high-strength magnets that power electric vehicle motors, the phosphors that light up television screens, the guidance systems inside precision missiles, and the tiny speakers and vibration motors in smartphones. Without them, much of modern technology simply wouldn't work.

Washington's Counter-Moves

Former US President Donald Trump kicked off a series of deals to try and chip away at this control. Over ten days, he locked in agreements with countries like Australia, Malaysia, Cambodia, and Japan. The goal? Bolster the supply of these minerals, which are key for everything from batteries to defense tech. Washington's been trying to counter Beijing's grip for a while now, and these deals came right before a meeting with Chinese President Xi Jinping to address contentious trade issues.

The pacts with Australia, Malaysia, and Thailand outlined multibillion-dollar plans, commitments to fair trade practices, and pledges to avoid export bans or quotas. With Japan, a recent win, the agreement aimed at securing raw and processed critical minerals, promising funding for selected projects within six months. Wendy Cutler, a senior vice president at Asia Society Policy Institute, sees these deals as potentially "benefiting immensely from being linked together in a plurilateral agreement with strong commitments, financing and pooling of resources." She expects more deals under the Trump administration.

Australia's Blunt Assessment

Australia's resources minister, Madeleine King, hasn't minced words about the situation. She says the idea of an "open international market in critical minerals and rare earths is a mirage." Why? Because there's "one supplier" who can dictate "where the market goes, whether that be in pricing or supply." That's a pretty blunt assessment.

Mastheads

Australia's got its own billion-dollar bid underway to take on China's dominance. It's a major effort, reflecting the global unease. Plus, these deals are seen as a "game-changer" that could help level the playing field, according to some analysts. The country's vast mineral resources could be a big part of diversifying the global supply.

A Long Road Ahead

Even with all these new deals and renewed efforts, analysts warn that real change won't happen overnight. Dennis Wilder, a senior fellow at Georgetown University and a former US intelligence official, puts it plainly: "What we're trying to do now is to get off the Chinese as the primary supply chain, but that will take time." He added that in the "medium term, we will get off the Chinese supply chain, but Right now, there's still a great deal of dependency on China."

This is a long game. Building new rare earth mines? Goldman Sachs reckons that can take up to a decade. Finding new reserves outside China and Myanmar is already tough. And setting up new refineries? That's another five years, give or take. The costs involved are huge, and the efforts will take years to really pay off.

The historical context of America's Mountain Pass mine shows how quickly dominance can shift. Back in 1952, this mine in the Mojave Desert was the world's top rare earth source. It supplied materials for colour TVs and early computers, dominating output well into the 1980s. But then environmental rules tightened, costs went up, and China stepped in. They used cheap labour, lax standards, and aggressive industrial policy to corner the market. By the early 2000s, Mountain Pass had shut down.

It reopened in 2018, now producing roughly 47,000 metric tons of rare earths annually — just over 10% of global supply. But here's where it gets interesting: most of that material still gets shipped to China for final processing before being sold to manufacturers around the world. It shows just how entrenched China's position is.

Beijing's Leverage

The stakes are only getting higher. China's already shown it's willing to use its rare earth leverage. They restricted exports of seven rare earth elements to the US after a round of US tariffs. Then, in October, Beijing took an even more extreme measure, threatening to curb trade of *any* minerals or products that contain even trace amounts of those elements. That kind of move sends shivers down supply chains globally, rattling suppliers and manufacturers alike.

Sure, the flurry of international deals brings much-needed financial support and may eventually challenge Beijing's stranglehold, the path to a truly diversified rare earth supply chain is long, expensive, and fraught with geopolitical tension.

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The question isn't just about finding new mines; it's about building an entire processing and manufacturing ecosystem that can truly stand independent from China, a challenge that could define global industrial policy for years to come.

This article was created with AI assistance.