On December 3, 2025, the global rare earths industry finds itself at a crossroads, as governments and companies around the world scramble to secure supplies of these 17 critical elements. From the smartphones in our pockets to the wind turbines dotting coastlines, rare earths have quietly become the backbone of modern technology, but their supply chain is anything but assured. Recent export restrictions by China, the world’s dominant player, have sent shockwaves through markets and forced policymakers in Europe, India, and beyond to rethink their strategies.
Rare earths are a group of 17 elements with tongue-twisting names like neodymium, praseodymium, dysprosium, and terbium—yet their applications are anything but obscure. According to The Economic Times, these four elements alone drive most of the sector’s economic value, powering everything from electric vehicles to military hardware. Neodymium-iron-boron magnets, for example, are about ten times more powerful than conventional magnets and are essential for making wind turbines efficient. A single offshore wind turbine can contain up to one tonne of these magnetic rare earths.
The reach of rare earths extends even further. Each F-35 fighter jet, a marvel of modern military engineering, requires more than 400 kilograms of rare earths, notes the US Congressional Research Service as cited by The Economic Times. In the consumer world, every smartphone contains about three grams of rare earths—amounting to more than 3,700 tonnes for the 1.24 billion devices sold worldwide in 2024 alone. Electric and hybrid vehicle batteries and motors rely on between 1.2 and 3.5 kilograms of these elements each. Even combustion-engine vehicles, oil refining, glass polishing, lasers, and medical devices depend on rare earths for their performance and efficiency.
China’s dominance in this field is hard to overstate. As Praveen Pothumahanty, a partner at EY-Parthenon, detailed in The Times of India, China holds about 44 million tons—roughly half of the world’s rare earth reserves—and controls a staggering 90% of global processing capacity. This concentration has made the rest of the world deeply dependent on Chinese exports. When China imposed export restrictions on rare earth magnets in June 2025, the impact was immediate and far-reaching. Indian electric vehicle manufacturers, for instance, reported production slowdowns, and supply chain concerns echoed across continents. Although China eased restrictions on light rare earths in August 2025, the risk of future disruptions remains ever-present.
Companies and countries are now urgently re-evaluating their strategies. On December 2, 2025, The Wall Street Journal reported that Chinese rare-earth magnet companies are adjusting their magnet formulas to avoid using restricted elements and are seeking other legal ways to maintain exports. While these workarounds are not perfect, they signal the determination of Chinese firms to keep their products flowing to global markets. At the same time, Western companies and investors are watching closely as firms like Nova Minerals, Ioneer, Lynas Rare Earths, MP Materials, Energy Fuels, NioCorp, and VanEck Vectors Rare Earth/Strategic Metals ETF step up efforts to develop alternative sources.
Europe, too, is taking action. The European Union has announced plans to boost domestic production of critical raw materials, including rare earths, to reduce reliance on Chinese imports. As part of this strategy, the EU is exploring new mining projects, streamlining permitting processes, and investing in research to improve extraction and processing technologies. The goal is clear: to ensure that the continent’s green energy and high-tech ambitions are not derailed by supply shocks from abroad.
India, with its estimated 7 million tons of rare earth reserves, is also moving to reduce its vulnerability. While the country currently produces neodymium and neodymium-praseodymium oxides—the precursors to neodymium metal—there are bottlenecks further down the value chain. As Pothumahanty explains, India’s rare earth resources are primarily monazite-based, which contain lower concentrations of rare earths compared to China’s bastnäsite-rich deposits. Monazite also carries appreciable levels of thorium, making it mildly radioactive and necessitating stringent radiological safeguards and complex waste management. These factors drive up costs and slow production.
Despite these challenges, the Indian government is taking decisive steps. The Ministry of Heavy Industries has announced a ₹7,280-crore incentive scheme to build 6,000 tons per annum of integrated rare earth magnet capacity. This includes ₹6,450 crore in sales-linked incentives and ₹750 crore in capital subsidies for up to five beneficiaries. The aim is to support India’s EV30@30 goal—achieving 30% electric vehicle penetration by 2030—and to reduce supply chain risk through greater domestic integration and strategic partnerships with countries like Japan and the United States.
Currently, about 100% of India’s rare earth magnet demand is met through imports, with 65% coming from China, 15% from Japan, and the rest from Hong Kong and South Korea. In 2024, India imported roughly 2.3 kilotons of rare earth magnets. With demand expected to triple to about 6 kilotons by 2030, localizing production has become critical. Policymakers and industry leaders are calling for a unified national panel to consolidate research and accelerate the transition from laboratory-scale innovations to commercial manufacturing. There’s also a push for operational enablers—such as streamlined environmental clearances and infrastructure support—to speed up project timelines and make investments more attractive.
Another key focus is the development of a circular economy for rare earths. As Pothumahanty points out, recycling end-of-life components like motors and audio systems could provide a stable secondary supply of rare earth minerals, reducing the environmental impact of mining and strengthening supply chain resilience. India is still in the early stages of this effort, but with timely policy support, the country could emerge as a global hub for rare earth magnet recycling.
As the world races to electrify transportation, expand renewable energy, and maintain technological leadership, the stakes for securing rare earth supplies have never been higher. The recent export restrictions by China have exposed just how fragile the current system is, prompting a flurry of activity from Brussels to New Delhi. Whether through new mining projects, technological innovation, recycling, or international cooperation, the message is clear: the era of taking rare earths for granted is over. Now, it’s a global contest to see who can build the most resilient, sustainable, and secure supply chain for these indispensable elements.
While the road ahead is fraught with technical, regulatory, and geopolitical hurdles, the flurry of initiatives underway suggests that the world’s rare earth ambitions are anything but rare. The next few years will reveal which strategies pay off—and who will lead the charge in powering the technologies of tomorrow.
