China’s grip on the world’s supply of rare earth minerals and strategic metals tightened further in August 2025, as official data revealed a record surge in exports just months after Beijing’s controversial export controls rattled global markets. According to Bloomberg calculations based on government figures, China shipped 7,338 tons of rare earth products in August—the highest monthly tally since records began in 2012. This dramatic rebound followed a sharp 23 percent drop in July, when exports slumped to 5,994 tons after peaking at multi-year highs in June.
Rare earth minerals, though their name suggests otherwise, are not especially rare in the Earth’s crust. But their mining and processing are concentrated heavily in China, which accounted for more than 69 percent of global mine output and nearly half of the world’s reserves in 2024, according to the US Geological Survey. The strategic importance of these minerals—vital for high-performance magnets, semiconductors, electric vehicles, wind turbines, and even advanced defense equipment—has made them a flashpoint in ongoing trade disputes between Beijing, Washington, and Brussels.
China’s dominance extends beyond mining: it handles about 90 percent of rare earth processing worldwide, giving it unrivaled leverage over the global supply chain. As reported by CNBC and Bloomberg, Beijing’s export restrictions, imposed in response to US tariffs and Western limitations on technology transfer, became a central bargaining chip in a broader geopolitical standoff. The Ministry of Commerce in Beijing has maintained that these measures are necessary to protect national security, but critics in the US and Europe see them as economic weapons wielded in a high-stakes contest for technological supremacy.
The impact of China’s export controls was immediate and severe. Licensing approvals for rare earth shipments slowed dramatically, slashing exports in April and May and disrupting supply chains from Detroit to Düsseldorf. Automakers outside China were forced to pause production due to shortages, while European firms—nearly half of whose rare earth imports came from China in 2024—grappled with mounting uncertainty. The European Chamber of Commerce in China told CNBC that at least one of its members lost millions of euros because of inconsistent licensing approvals, and warned that securing permits had become even more difficult in recent weeks.
In July, the European Parliament sounded the alarm, urging the EU to bolster its own rare earth capabilities and warning that China’s licensing rules could be used to extract sensitive corporate data. The message was clear: Europe’s reliance on Chinese minerals had become a strategic vulnerability, and the continent needed to act fast to safeguard its high-tech industries.
India, too, has felt the pinch. Towards the end of August, China agreed to ease supply curbs to India, providing a measure of relief after months of strained supply chains. But experts cautioned that the country remains exposed. Rajoo Goel, head of the industry group ELCINA, told The Times of India, “Unlike China, India hasn’t sufficiently invested in securing rare earth supply chains.” Like many nations, India is now scrambling to diversify its sources and reduce its dependence on Chinese minerals.
Meanwhile, the rare earth saga is playing out against a backdrop of broader tensions over strategic metals. Nowhere is this more evident than in the market for germanium—a metal crucial for military thermal-imaging systems, fiber optics, and solar panels. In 2023, Beijing announced it would halt exports of germanium, gallium, and antimony after the US and the Netherlands imposed strict controls on advanced chips and chipmaking equipment. The result? A supply squeeze that has sent germanium prices soaring to their highest level in at least 14 years.
“I spent my whole summer taking two to three enquiries a day from companies looking for germanium,” Terence Bell of Strategic Metal Investments told Financial Times. “It’s desperate out there.” The numbers bear him out: US imports of germanium from China fell about 40 percent between January and July 2025 compared to the same period the previous year, according to an analysis by Silverado Policy Accelerator. Prices, meanwhile, have skyrocketed—from just over $1,000 per kilogram at the start of 2023 to nearly $5,000 per kilogram in September 2025, Fastmarkets reported.
The squeeze has left traders and buyers scrambling. “Almost everybody is approaching us” and there is “panic” in the market, one executive at Tradium told FT, adding that the company cannot fulfill “all the enquiries we’re getting.” Aaron Jerome, a trader at Lipmann Walton & Co., described the situation bluntly: The cutoff “devastated the ability for there to be a functioning spot market. People we used to be able to buy 100kg from, we’re lucky now if they can give us 10kg, and the price is three to four times higher.”
Germanium is not especially rare geologically, but its extraction is challenging and expensive. It is typically recovered as a byproduct of zinc processing and from coal fly ash, making it difficult for supply to ramp up quickly in response to demand spikes. Russia has been a source of the metal in the past, but Western sanctions following Moscow’s full-scale invasion of Ukraine have further tightened the market, especially for buyers in Europe and North America.
The defense industry has been particularly hard hit. In August, US defense contractor Lockheed Martin announced a supply agreement with Korea Zinc—a move that traders saw as a sign of just how tight the germanium market had become. For years, defense companies left germanium procurement to subcontractors, but as Fastmarkets estimates global demand at about 180 to 200 tonnes annually, even the biggest players are now being forced to take matters into their own hands.
Amid these supply shocks, geopolitical maneuvering continues. The record surge in Chinese rare earth exports in August came just days before an anticipated phone call between President Xi Jinping and former President Donald Trump, with rare earths expected to feature prominently in their discussions. Following talks in Madrid, Trump indicated his intention to raise the issue directly with Xi, underscoring the centrality of these minerals to both economic and security interests.
For now, the world remains caught in a web of dependency, with China at its center. As nations scramble to shore up supply chains, diversify sources, and invest in domestic capacity, the stakes could hardly be higher. Whether the current crisis will spur lasting change or simply mark another chapter in the long-running saga of strategic minerals remains to be seen.