New Delhi: In an increasingly electrified world, the silent yet strategic battleground of the 21st century is not oil—but rare earth elements (REEs). These 17 obscure minerals, with names like neodymium and dysprosium, are essential for the magnets that run everything from wind turbines and electric vehicles to smartphones and guided missiles. The twist? China controls nearly 60% of rare earth mining and over 85% of their processing globally.

This level of monopoly is not accidental, nor is it new. In fact, China’s state-directed strategy has, over the past three decades, systematically underpriced global competitors, consolidated the supply chain at home, and restricted exports to increase global dependence. The result is a critical chokepoint in the world’s green transition and technological future.

A strategic tool, not just a trade issue

China has demonstrated in the past that rare earths can be used as a geopolitical tool. In 2010, following a maritime dispute with Japan, China cut off rare earth exports to the country, leading to a staggering 1,000% price spike globally. The ripple effect was instant—global manufacturers panicked, governments scrambled to secure alternative sources, and policymakers suddenly woke up to a metal they had barely heard of.

Now, amid escalating U.S.-China tensions and export controls on gallium and germanium, Beijing’s approach appears no different. It is increasingly tying the export of strategic minerals to national security objectives and diplomatic pressure. This has wide-ranging implications not just for advanced economies, but for developing nations like India that are scaling up clean energy, semiconductors, and electric mobility.

The clean energy paradox

The global push for clean technologies—solar, wind, EVs, and grid storage—depends heavily on rare earths. Ironically, this creates a green dependency on China, even as nations attempt to de-risk fossil fuel imports.

For example, direct-drive wind turbines, preferred for their higher efficiency and lower maintenance, require powerful permanent magnets made from neodymium and praseodymium. China dominates the production of these magnets. Any disruption—policy-led or price-driven—could derail renewable energy projects, delay manufacturing, or spike costs.

What the world must do

There are no quick fixes. Mining rare earths is environmentally damaging, and their refining even more so. That’s one reason many Western countries shut down their REE industries, ceding the space to China. But today, rebuilding domestic capabilities or sourcing from alternative partners is no longer optional—it’s strategic.

Countries like the US, Australia, and Japan are investing in rare earth supply diversification, with some promising results. India, too, possesses deposits of monazite and other rare earth-bearing minerals along its coasts. However, mining is one thing, developing refining and magnet manufacturing capabilities is another. This is where the real investment is needed.

The global private sector also needs to rethink supply chain design. A just-in-time model that depends on single-source suppliers is no longer viable. Hedging, stockpiling, and forming mineral alliances could be crucial tools to navigate the emerging resource nationalism.

India’s opportunity and vulnerability

India has been slow to enter the rare earth race, but it cannot afford to remain a bystander. With its ambitions in solar manufacturing, electric vehicles, electronics, and defence, rare earth access will define how self-reliant the country really is.

Public sector entities like IREL (India) Ltd have explored rare earths, but a comprehensive national strategy is missing. India should leverage its Quad partnership, collaborate on critical mineral value chains, and incentivise domestic refining technologies—before it is too late.

Conclusion

Rare earths may be invisible to the eye, but they sit at the heart of every modern technological system. China’s dominance over this sector is not just about minerals—it is about power, influence, and global leverage. The world must respond with urgency, not panic. Because in the race for the future, whoever controls the inputs will shape the outcomes.

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