In the context of globalization and geopolitical competition, the country that can control the supply of rare earths will hold the world's technology future.
From a mobile phone in a shirt pocket to a satellite flying in space, rare earth plays an indispensable role in almost every modern technology application. Although it only accounts for a very small part of the equipment, rare earth elements such as neodymium, dysprosium or terbium are the viable elements for the components to operate stably, effectively and accurately. Meanwhile, the supply of rare earths is extremely limited and unevenly distributed in the world, making exploitation and ownership of them a fierce geopolitical competition.
Each country is trying to expand its influence, ensure security of supply and reduce dependence on potential opponents. The story of rare earths is no longer just a simple mineral exploitation, but has become a strategic issue, dominating both the technological fortune and the international position of a country.
Important factors in the technology and defense industries
Rare earth is a group of minerals that play a key role in the high-tech value chain. Although not as prominent as gold or oil, they are an irreplaceable factor in many technological equipment that modern society cannot lack.
One of the outstanding applications of rare earths is the eternal magnet, a material with strong magnetic power and small size, used in electric motors, headphones, generators and many other devices. Elements such as neodymium and Samarium are irreplaceable ingredients in this type of magnet. In the clean energy industry alone, the production of electric vehicles cannot be without lithium-ion batteries, where rare earth plays a significant role as a support in the process of heat control and energy storage. Similarly, high-performance wind turbines today also need rare earth magnetes to operate continuously in harsh conditions.
Not only stopping at the civil sector, rare earths also play a vital role in the defense industry. A fighter jet cannot fly without rare earth guidance sensors. radar systems, cruise missiles, satellite guided weapons, even wave-breaking devices and information security all depend on rare earth elements in component structure. Therefore, the ability to access rare land supply is not only a commercial story but also a national security problem.
Although rare earths exist in many places in the world, their exploitation is extremely complicated. The reason lies in the fact that these elements are often not located separately, but are mixed with many other minerals with similar chemical properties. Separating and enriching rare earths requires high technology, high costs and a long time. Not only that, the treatment process also poses a serious risk of environmental pollution, if not strictly controlled in terms of techniques and laws.
The current supply of rare earths in the world mainly comes from a few countries, the most prominent of which is China. With more than half of the world's rare earth reserves in its territory, the country not only controls most of the exploitation, but also has an absolute dominance in the refining and deep processing stages. China has even used this control as a tool for political pressure by suspending exports to Western partners in 2023, suggesting that the soft power of this mineral could have a major impact on the global situation.
All of the above factors have made rare earths an issue beyond the framework of the regular mining industry, becoming an indispensable strategic pillar for both high-tech economies and modern armed forces.
Major countries in the rare earth race
In the context of rare earths playing a vital role in technology and defense, it is not surprising that the world's powers are all entering a race to access and control this mineral supply. China currently holds the biggest advantage, not only thanks to its huge domestic reserves but also because it has established a complete supply chain from exploitation, refining to export. The Bayan Obo mine in the Inner Mongolia Autonomous Region is a clear testament to this dominance, as it is currently the world's largest rare earth mine.
However, China's remarkable development has raised concerns in many other countries. The US has identified this issue early and has signed many agreements to ensure security of rare earth supply, notably the commitment signed in 2017 and the move to promote domestic mineral development in 2020. During his current term, President Donald Trump continues to focus on this issue, as reflected in promoting cooperation agreements with Kazakhstan on strategic minerals and energy. At the same time, Ukraine has also become a target for the US because it owns up to 5% of global mineral reserves, many of which are located in areas under Russian influence.
In Europe, the European Union is under great pressure as it has to import up to 98% of rare earth magnetes from China. This has prompted them to stepped up their search for strategic partners in Central Asia, where many countries are rich in resources but lack infrastructure and mining technology. Uzbekistan, for example, has announced a plan to invest $2.6 billion in the mining industry, and the president has signed a deal with France to develop national geological services. These efforts not only expand supply but also create favorable conditions to attract investment capital from the US and EU.
Russia is not out of the picture. Although it was once a lithium importer, Moscow has now announced that it will produce nearly 60,000 tons of lithium carbonate by 2030. The Russian government is encouraging mineral exploitation even in areas with harsh conditions such as Siberia. It is noteworthy that President Putin is ready to cooperate with international partners, including the US, to exploit this potential. The strategic change comes partly as a result of the embargoes, forcing Russia to step up its autonomy in raw materials.
Even small countries like Romania are not left out. With significant rare earth resources and exploitable technical potential, Romania can play an important role in helping the EU reduce dependence on imports from China. However, the EU has not yet put this country on the priority investment map, partly because it lacks a national strategy and partly because the exploitation infrastructure has not been modernised synchronously.
Another noteworthy point is the issue of traceability, which is becoming a key factor to ensure transparency, sustainability and compliance with regulations in the mineral supply chain. International organizations such as the OECD and the IEA are calling for the development of a cross-border traceability system, with transparent data on origin, geographical journey and chain of ownership. Only with such a system can the world control risks, protect the environment and maintain a stable mineral supply for the future of technology.
