Rare earths are more in focus than ever before: According to a new analysis by the consulting firm Wood Mackenzie, the strategic metals are now among the most important trends in the global energy and mining sector. While China continues to control more than 80% of processing and the majority of high-performance magnets, the USA, Europe, Canada, and Japan are driving new supply chains and projects for rare earths outside of the People’s Republic.
Rare earths as leverage in trade and security policy
The starting point for the recent dynamic was tightened export controls from Beijing. In April 2025, China introduced additional approval requirements for selected rare earths and magnet products. These measures made it clear how dependent the West is on Chinese supply chains – and accelerated the political reaction.
Wood Mackenzie sees rare earths today at the core of energy and technology security. The metals of the lanthanide series, as well as scandium and yttrium, are indispensable for electric motors in electric vehicles, permanent magnets in wind turbines, electronics, robotics, and numerous defense systems, according to the experts.
The experts speak of an “extraordinary leverage” of rare earths in trade negotiations. China’s dominance in refining and magnetic materials gives Beijing growing geopolitical influence – and forces other states to build resilient, non-Chinese supply chains.
Which in turn explains the significant increase in offtake agreements, government agreements, and G7 initiatives in 2024 and 2025. Rare earths are no longer considered a niche, but a central component of the strategy for energy transition and industrial policy.
USA, Canada, and Europe: Diplomacy for rare earths
The USA has taken the lead in diplomatic efforts for rare earths. As early as 2024, Washington signed a memorandum on critical minerals with Norway. In 2025, a G7 action plan, a G7 alliance to coordinate investments and long-term offtake agreements, and a framework agreement with Japan on mining and processing followed.
Another agreement – the Trump–Takaichi Pact – includes lithium, cobalt, and nickel in addition to rare earths. In addition, the USA concluded a memorandum with Malaysia on trade, investment, and recycling and defined Australia as a key partner in the goal of reducing China’s dominance in the REE sector.
Ironically, the United States was itself the leading producer of rare earths until the late 20th century. Today, Washington enters into negotiations with a clear structural disadvantage because large parts of the value chain have been shifted to Asia.
Canada is positioning itself in parallel as a democratic supplier of rare earths and other critical raw materials. Ottawa and Berlin, for example, signed a declaration in August to deepen cooperation on critical minerals. Another concept envisions a framework between Canada, Japan, and South Korea in which the supply of rare earths is closely linked to security-relevant technologies.
Europe is integrating rare earths into a broader network of partnerships on critical raw materials. Agreements with Canada, Norway, Argentina, the DR Congo, Namibia, Kazakhstan, and Australia are intended to give the EU preferential access to concentrates and separated oxides. Some African agreements also include passages on local processing, even if implementation has so far only been gradual.
Japan complements these activities with its own agreements, such as through the state raw materials agency JOGMEC, which cooperates with Namibia Critical Metals on the Lofdal heavy rare earths project.
Projects, offtake agreements, and recycling: New offers for rare earths
Parallel to the political level, the concrete project and supply relationships for rare earths have further intensified in 2024 and 2025. In Australia and North America, the focus is on building complete value chains: ABx Group and Ucore Rare Metals (WKN A2QJQ4 / TSXV UCU), for example, signed a letter of intent for a joint Australia–USA supply chain. Iluka Resources and Tronox are expanding their processing capacities with the support of export credit agencies.
Arafura Rare Earths is pushing ahead with the Nolans project, which is expected to supply around 4% of the global supply of rare earths after commissioning. In Brazil, Serra Verde secured a US development loan of US$465 million and is increasingly focusing future deliveries on Western and Asian customers, while additional separation capacities are being built.
The recycling of rare earths is also gaining in importance. The Canadian company Cyclic Materials has concluded an offtake agreement with Solvay, according to which recycled mixed oxides from Kingston (Ontario) will be delivered to France. An announced research center with a volume of US$25 million is intended to support a circular supply of the European magnet industry with recycled rare earths.
The strategic increase in importance is also reflected in the project pipeline: Governments and industry are increasingly financing mines and refineries directly. Among others, Lynas Rare Earths, Iluka, MP Materials, and the Saskatchewan Research Council are being funded, jointly building capacities from the mine to the magnet outside of China.
At the same time, the contract conditions for rare earths are changing. Western customers are willing to accept price premiums for non-Chinese material and are concluding long-term offtake agreements with price floors and take-or-pay clauses. Projects such as the Solvay expansion in France and the SRC–ReAlloys agreement in Canada show how political guidelines are now leading to concrete trade flows for primary and recycled rare earths.
Conclusion: Rare earths remain a strategic key raw material
For the raw materials sector, it is clear: Rare earths have finally shed their niche status. They have become a strategic key raw material for energy transition, high technology, and defense – and thus a central factor in the reorganization of global supply chains.
Whether the multitude of new projects and partnerships will be sufficient to noticeably reduce China’s dominant position in rare earths will only become apparent in the coming years. However, it is certain that the competition for secure, diversified, and politically stable sources of supply for rare earths is likely to remain a core topic of international raw materials markets – with direct effects on project financing, contract structures, and the valuation of corresponding companies.
