By: Céleste Wetmore
The Chinese manufacture more than clothing, iPhones, and other consumer goods. Their current near-monopoly over rare earth element (REE) mining and, most critically, production is keeping them in the limelight as the 2030s approach. Given the importance of REEs in military equipment and relevant capabilities, the United States aims to reduce reliance on exports from China. However, given the difficult nature of REE location, mining, and production, these endeavors’ results will be suboptimal if attempted alone. The U.S. must exercise more strategic diplomacy to build a sustainable supply chain outside of China’s mineral processing monopoly.
While REEs themselves are not rare, they are rarely found in sufficient abundance in a single location for their mining to be economically viable. Even then, concentrated mineral deposits often occur in remote, isolated locations with sparse availability near the surface and radioactive elements mixed in, making them expensive to locate and extract. REEs include 17 metallic elements crucial to technological efficiency across sectors, and nearly 70% of actively mined rare earth minerals are found in the Bayan Obo mine in central China. The second, third, and fourth largest actively mined deposits are found in the U.S., Burma, and Australia, respectively, but these efforts added up to just 23% of global production in 2024.
Graph sourced from the Government of Canada
The clear imbalance of these numbers is formidable, but considering that extraction has steadily increased outside China since 2017, the most urgent issue at hand is REE refinement. Any successful mining effort is useless without the capabilities to process and utilize REEs to produce electronics and other pressing goods. This refinement process is China’s specialty: Beijing currently controls 90% of refined production, a complex process that requires specialized knowledge and machinery.
Modern day innovation, business, and life are centered around the electronics, machines, and renewable energy made possible by REEs. They are the backbone of U.S. military technology and defense systems. To put it in perspective: a single F-35 fighter jet calls for over 900 pounds of REEs. Looking to the future, the U.S. will not be able to remain the strongest military in the world without REEs, necessitating a reliable supply chain.
The current REE supply chain is fundamentally dependent upon Chinese refinement capabilities, creating a dangerous bottleneck for the U.S. and partners, including key North Atlantic Treaty Organization (NATO) allies. China has been developing technical know-how, processing procedures, and manufacturing facilities since the 1980s. Driven by fierce domestic competition and enabled by loose environmental regulations and low labor costs, Chinese companies have accelerated extraction and production timelines and achieved an absolute advantage in REE processing.
Graph sourced from Statista 2026
As can be reasonably expected from any powerful state when in possession of such significant leverage, the Chinese government has proven willingness to levy these coveted production capabilities to build its relative advantage. In 2023, China imposed a ban on the export of technologies used for rare earth separation and processing, obstructing the development of such capabilities outside its borders.
Western companies have struggled to roll out these advanced technical operations alongside pollution concerns, and it can take years to construct and fully operationalize separation, processing, and manufacturing facilities. Considering China’s natural resource endowment coupled with their unprecedented economic growth over the last few decades, no one country will be able to match China’s dominance in the global supply chain for REEs — at least, not quickly.
In the long-term, the U.S. should strive to develop an REE supply chain as independent as possible, and the U.S. is working toward this end. However, it would be dangerous to accept reliance on China during an intermediary development period that could last years — as it did in China. Dependence on an ally yields a dependency, possible to overcome eventually, but a dependency on China creates a proven vulnerability. The U.S. must lead collaboration to develop a strong, sustainable REE supply chain outside of China.
The 2025 U.S.-Australia critical minerals partnership established a bilateral commitment between the countries to invest more than $3 billion into critical minerals projects, including an advanced refinery in Western Australia. This strategic step must set a precedent for U.S. policymakers in taking action to build the mining and production capabilities needed to reduce dependence on China. While China controls the world’s largest REE reserves, with 44 million metric tons, Brazil, India, and Australia hold nearly 35 metric tons combined and are all working to develop refinement capabilities. This simple math demonstrates the potential of a partnership and the necessity of pooled resources and investment to even approach China’s place at the top of the critical minerals food chain.
REE mining and production present several obstacles, hence the need to join multiple countries’ specialities and strengths. Collaboration ensures mutual security that will strengthen the U.S. and its historic defense and commercial partners, including those in NATO, the United Nations, and Major Non-NATO Allies. Partnerships will be crucial to establishing a reliable REE supply chain and processing capabilities in the short-term as America seeks self-sufficiency in the long-term.
