The global rare earths market is experiencing a seismic shift in 2025, as escalating geopolitical tensions, surging demand from electric vehicles and clean energy, and efforts to localize critical mineral supply chains converge in dramatic fashion. The United States and China, long at the center of rare earths policy, now find themselves locked in a high-stakes contest over the future of these 17 metals, essential to everything from smartphones and wind turbines to advanced fighter jets.
China’s dominance in rare earths has never been more pronounced. According to the International Energy Agency, the country accounted for a staggering 91% of global refined output and 60% of total mine production in 2024. The Asia Pacific region as a whole dominated rare earth supply, with China controlling roughly 70% of output, 85% of processing capacity, and 90% of magnet manufacturing, as reported by Persistence Market Research. This concentration of supply has given Beijing enormous leverage, and in August 2025, China introduced sweeping new export controls on key rare earth elements—such as terbium, dysprosium, and gadolinium—and permanent magnet technologies.
These export controls, detailed in China’s Announcement 18 and official Notice No. 61, require foreign companies to secure government approval before exporting products containing even trace amounts of Chinese-origin rare earths or using Chinese extraction or magnet-making technologies. The rules extend to products manufactured outside China if they contain as little as 0.1% Chinese-sourced content. Chatham House noted that these measures give Beijing significant sway over dual-use technologies, especially those with defense applications. China’s Ministry of Commerce insisted the controls are a “legitimate measure” to prevent unauthorized military use, clarifying that exports for civilian use would still be approved under licensing. Nevertheless, the move has sent shockwaves through global supply chains, raising compliance risks and regulatory uncertainty for manufacturers worldwide.
The United States, for its part, has responded with urgency. On October 15, 2025, President Donald Trump declared, “We’re in one now,” when asked if the country was entering a sustained trade war with China, according to Seeking Alpha. The U.S. government has made boosting domestic rare earth production a national priority, and the Department of Defense (DoD) has accelerated plans to stockpile $1 billion in critical minerals. In July 2025, the DoD acquired a 15% stake in MP Materials—the only rare earth mining and processing facility in the U.S.—and committed $400 million to expand its Mountain Pass mine and build a second magnet manufacturing facility. MP Materials also secured $1 billion in financing from JPMorgan Chase and Goldman Sachs, and signed a price floor commitment of $110 per kilogram for neodymium and praseodymium oxide products, well above the long-term average price.
MP Materials’ strategic positioning has paid off handsomely for investors. The company’s share price soared over 431% year-to-date, hitting an all-time high of $100.25 on October 14, 2025. Its advanced facility in Fort Worth, Texas, is expected to boost U.S. rare earth magnet manufacturing capacity to 10,000 metric tons by 2028. Yet, some analysts warn that the company’s valuation—now over $12.5 billion with a forward P/E ratio exceeding 80—may reflect excessive optimism. Notably, MP Materials ceased shipments to China in April 2025 amid rising Sino-U.S. tensions, ending its reliance on Chinese company Shenghe Resources, which previously accounted for up to 90% of its revenue.
Other non-Chinese players are seizing the moment. Australia’s Lynas Rare Earths, the largest producer outside China, operates the Mount Weld mine and a processing facility in Malaysia. The company contributed 4% of global refined rare earth production in 2024—four times MP Materials’ share, according to the IEA. Lynas opened Australia’s first rare earth processing facility in November 2024 and secured $258 million in DoD funding to build refineries in the U.S. In May 2025, Lynas became the first commercial heavy rare earths producer outside China, following upgrades to its Malaysian plant. Its shares surged 249% year-to-date, trading at $14.00 on October 20, 2025. However, Lynas remains exposed to political and regulatory risks in Malaysia, where environmental concerns over radioactive waste linger.
Meanwhile, USA Rare Earth, which went public in March 2025, is racing to establish a neodymium magnet manufacturing plant in Oklahoma. The company plans to commission its first production line in early 2026 and has signed 12 memoranda of understanding with customers across aerospace, defense, and automotive sectors, representing 300 tons of annual production. Its stock jumped 216% since its IPO, closing at $31.59 on October 20. Still, USA Rare Earth has yet to generate revenue and reported an $8.8 million operating loss in Q2 2025, highlighting the execution risk facing new entrants.
Beyond North America and Australia, new rare earth projects are emerging in Brazil and Europe. Atlas Critical Minerals is advancing two projects in Brazil, reporting high-grade mineralization and strong recovery rates for magnetic rare earth oxides. The company’s Iporá and Alto do Paranaíba projects are well-located near infrastructure and offer a dual-resource strategy. Analyst coverage remains optimistic, with H.C. Wainwright & Co. naming Atlas Lithium—a major shareholder—a "Top Pick for 2025." In Europe, Sweden’s LKAB launched a rare earth oxide project in Lulea, expected to supply up to 18% of Europe’s future demand, according to Persistence Market Research.
Recycling is also gaining traction as a secondary supply source. While rare earth recycling remains below 1% globally, companies like Cyclic Materials, backed by Jaguar Land Rover and Microsoft, are working to build circular supply chains that could reduce environmental impact and increase sourcing stability. The rare earth elements market itself was valued at $7.2 billion in 2025 and is projected to reach $14.7 billion by 2032, supported by a 10.6% compound annual growth rate. Permanent magnets—especially neodymium and praseodymium—account for the largest application share, driven by the electric vehicle and wind power boom.
Energy Fuels Inc., a U.S.-based uranium and rare earth producer, is also expanding its rare earth portfolio, reporting pilot-scale dysprosium oxide production and plans to scale up heavy rare earth separation by late 2026. Analysts have praised the company’s strategic acquisitions and strong balance sheet, with Red Cloud Securities and H.C. Wainwright both issuing “Buy” ratings and highlighting its dual strength in uranium and rare earths.
Despite these efforts to diversify supply, China’s influence remains central to pricing and availability. The country’s stockpiling, export controls, and global partnerships continue to shape the market, with volatility—especially for heavy rare earths—remaining a persistent challenge. Trade disputes have caused rare earth stock prices to surge, and the market remains highly sensitive to policy shifts on both sides of the Pacific.
As 2025 draws to a close, the rare earths sector stands at a crossroads. The race to secure these critical minerals is intensifying, with governments and companies investing billions to build independent supply chains. Whether these efforts will be enough to loosen China’s grip remains to be seen, but one thing is clear: the stakes for technology, energy, and national security have never been higher.
