Beijing’s recent export controls on rare earth elements have triggered a worldwide race to reduce dependence on China, but experts warn that breaking its dominance will be neither quick nor easy.
In June, China’s Ministry of Commerce announced that it would approve qualified rare earth export applications and was open to talks with other nations. Still, the move has reinforced concerns that rare earths—critical to everything from electric vehicles to military hardware—have become the latest flashpoint in the US-China rivalry.
In response, companies across the globe have launched projects aimed at building alternative supply chains. Australia-listed St George Mining said on July 2 that it had begun identifying enriched mineral zones at its Araxá rare earths project in Brazil. Two weeks earlier, U.S. firms Kaz Resources and Cove Kaz Capital announced a joint effort with Kazakhstan’s national geological company to explore the Akbulak rare earth site.
To finance production in southern Greenland, Critical Metals Corp secured up to US$120 million in loans from the U.S. Export-Import Bank. Meanwhile, Lynas Rare Earth, listed in Australia, reported it is producing dysprosium oxide in Malaysia—making it the only commercial supplier of separated heavy rare earths outside China.
Governments are also mobilizing. India is investing up to US$408 million to boost rare earth output. In May, the U.S. and Ukraine signed a minerals deal to attract long-term American investment. Analysts say Australia could soon supply up to 20% of global light rare earths, excluding China—but warn this still falls far short of a full replacement.
Despite these efforts, experts agree that China’s lead remains formidable. The country processes 90% of the world’s rare earths and produces 69% of global output.
“China will continue holding the cards for quite a while,” said Indian analyst Vivek Y. Kelkar, noting that diversification efforts remain underdeveloped. “It hasn’t moved far enough to talk about the end of Chinese domination.”
Cameron Johnson of Shanghai-based Tidwalwave Solutions echoed that view, citing the enormous cost, time, and technical know-how required. “It takes at least 10 to 20 years and trillions in investment,” he said. “Most countries simply lack the talent and infrastructure to process these materials to required purities.”
Kelkar also warned that China’s market share gives it powerful pricing leverage, which could undercut rival projects by creating financial uncertainty. While Washington has been vocal about reducing reliance on Chinese supply chains, Kelkar pointed out that President Trump has yet to outline clear subsidy-driven financing strategies to match China’s state-backed model.
