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  Title	Rare earth: The engine behind modern technologies is in high demand
  ID	29224035
  External ID	6b1e065cf1757040ae5112e6b93d29a6
  Author	Dzul
  Published Date	Dec. 10, 2025, 7:02 p.m.
  Summary	Tighter rare earth controls from China put new pressure on global manufacturers by IFAST RESEARCH TEAM A NEW front has opened in US-China tensions — the battle over rare earth elements (REEs). The gro
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  URL	https://themalaysianreserve.com/2025/12/11/rare-earth-the-engine-behind-modern-technologies-is-in-high-demand
  Sentiment	Negative: 0.91674    Neutral: 0.05932    Positive: 0.02394
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  Content ID	36808958
  Key	98ea7a5c-145f-40c6-8e71-85aa7fb13f37
  Content	Tighter rare earth controls from China put new pressure on global manufacturers by IFAST RESEARCH TEAM A NEW front has opened in US-China tensions — the battle over rare earth elements (REEs). The group of 17 critical minerals essential to high-tech manufacturing and green energy technologies have come under the spotlight after China imposed export restrictions in April on seven of them: Samarium, gadolinium, terbium, dysprosium, lutetium, yttrium and scandium. The move, seen as a calculated response to Washington's sweeping tariff measures, pushed the US to return to the negotiating table in Geneva. The talks helped China secure a temporary trade truce extension until November 2025. However, on Oct 9, Beijing took another step by tightening export controls on five additional REEs — holmium, europium, ytterbium, thulium and erbium — and introducing a new '0.1% rule.' The rule requires foreign companies to obtain a Chinese export licence for any product manufactured abroad if it contains Chinese-origin rare earth metals or oxides that make up 0.1% or more of the item's total value. The new measure represents an unprecedented tightening of Chinese oversight across global manufacturing supply chains. The move also prompted US President Trump to threaten an additional 100% tariff on Chinese imports, escalating concerns of a renewed trade confrontation between the world's two largest economies. REEs are the Backbone of Modern Economies The applications of REEs are so extensive that China's export restrictions could have far-reaching effects. Categorised by atomic weight, REEs are broadly divided into light and heavy elements. Among the restricted light REEs, samarium is used in high-performance electronic components, while gadolinium plays a crucial role as a contrast agent in magnetic resonance imaging (MRI) scans. On the heavier end, rare earths are essential to a wide range of high-value applications, from clean energy technologies such as wind turbines and electric vehicles (EV) to advanced defence systems, that demand materials capable of performing under extreme conditions. The temporary suspension of rare earth exports in May sent ripples through E industry. US automakers such as Ford were forced to halt production of their Explorer SUV at the Chicago plant for a week due to a shortage of critical materials. Rivian Automotive Inc reported a 22% year-on-year (YoY) decline in vehicle deliveries and larger-than-expected losses in the second quarter of 2025 (2Q25), citing higher costs linked to the disruption in rare earth supplies essential for EV components. Beijing's latest rules have introduced stricter export curbs on materials linked to foreign military applications. Under the new framework, export licences for substances that could be used in weaponry, radar systems, or other defence technologies will be denied outright. The move has raised concerns that major US defence contractors, including Lockheed Martin Corp and RTX Corp, formerly known as Raytheon Technologies, may face production disruptions, potentially forcing costly product redesigns or the development of alternative materials to replace restricted rare earth inputs. The impact also extends beyond defence into emerging technologies. The global semiconductor supply chain is bracing for disruptions, as rare earths are essential for memory chips and advanced lithography equipment, including ASML Holding NV's extreme ultraviolet (EUV) machines. Meanwhile, next-generation innovations such as humanoid robots will require substantial amounts of Neodymium–Praseodymium (NdPr) magnets. According to the International Energy Agency, global demand for rare earths is projected to rise by around 65% by 2040 from 2024 levels, highlighting the growing strategic importance of these materials. In essence, REEs determine who controls the technologies and weaponry that underpin modern power. While the US can restrict China's access to advanced semiconductor chips, Beijing holds leverage upstream, dominating the supply of critical materials needed to produce them. The contest between the two superpowers now spans the entire technological value chain, from raw materials to finished innovation. China's Dominance in Rare Earths China's leverage on REEs stems from being the largest player in mining, processing, and refining. In 2024, China produced 270,000 metric tonnes of rare earth oxide, representing 69% of global output. While the US came in second place at 45,000 metric tonnes, it is still six times less than China. China also holds the world's largest REE reserves, estimated at 44 million metric tonnes of rare earth oxide, nearly half of the world's total, compared with just 2% for the US. But China's advantage goes far beyond mining. It possesses unrivalled technical expertise in solvent extraction, a complex and critical stage of rare earth separation where Western firms continue to lag due to limited skilled labour and technologies. Lynas Rare Earths Ltd of Australia remains the only major non-Chinese separator, focusing mainly on light REEs at its Malaysian facility. As a result, China stands as the only nation with a fully integrated 'mine-to-magnet' supply chain, capable of producing all 17 rare earth elements, a position that reinforces its strategic control over this essential industry. In response, other countries are accelerating efforts to build a China-free supply chain. The Group of Seven (G7) and other international bodies have prioritised standardisation of critical minerals markets. The Quad nations comprising Australia, India, Japan and the US, also launched the Quad Critical Minerals Initiative in July, aiming to reduce reliance on China through coordinated action. Australia and India play a central role due to their rich mineral reserves and in Australia's case, substantial refining capacity. Japan has expanded its lithium cooperation with Australia, while India has expedited domestic approvals and signed new bilateral supply agreements across Africa and Central Asia. The US government is also pursuing a resilient domestic supply chain. Recent initiatives include US$400 million (RM1.65 billion) in MP Materials Corp, acquiring 5% stakes in Lithium Americas Corp and its Thacker Pass joint venture (JV) with General Motors, set to become the largest lithium source in the Western Hemisphere, and supporting emerging players like USA Rare Earth Inc. There is also consideration to reallocate at least US$2 billion from the Chips Act to fund critical minerals projects. Establishing a fully independent rare earth supply chain is far from straightforward. Globally, opening a new mine takes 18 years on average and as long as 29 years in the US, as stringent environmental, social and governance (ESG) requirements and lengthy permitting processes slow progress. Even projects fast-tracked under the FAST-41 programme can still take up to a decade to become operational. Even scaling existing operations faces bottlenecks in separation, refining and magnet production. For instance, MP Materials' Texas NdPr oxide production scaled up 119% to 597 metric tonnes in 2Q25, yet this still represents less than 1% of China's output. Even with pilot facilities, commercialisation requires substantial time, capital and research and design (R&D), while magnet manufacturing remains China-dominated. Chinese researchers are improving efficiency, with pilot methods reportedly cutting mining time by 70%, electricity use by 60% and boosting recovery rates above 90%, highlighting Beijing's ongoing structural advantage. In the short term, China's dominance is unlikely to be challenged, while medium- to long-term diversification will depend on sustained Western Government support and R&D capabilities. The views expressed are of the research team and do not necessarily reflect the stand of the newspaper's owners and editorial board. This article first appeared in The Malaysian Reserve weekly print edition
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  Publisher Name	Malaysian Reserve (#17229)
  Publisher URL	https://themalaysianreserve.com/
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  Trust Flow Score	21
  Citation Flow Score	52

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  Data Source Name	NewsCatcher (#303)
  Data Source Type	news
  Data Source URL	https://www.newscatcherapi.com/
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