News BD
Released September 16
China continues to dominate the global rare earth market, causing losses of millions of euros for at least one European company.
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China Keeps Tight Grip on Rare Earths, Costing at Least One Company ‘Millions of Euros’
Introduction
The global economy is now going through a phase where natural resources are not just business commodities but also powerful geopolitical tools. Among them, one of the most critical is Rare Earths. From modern technology and electronics to electric vehicles, defense industries, and even daily life—rare earths are essential.
Currently, the world’s largest controller of this market is China. In recent times, China has tightened its export restrictions and quota systems. According to the European Chamber of Commerce, at least one major European company has already suffered losses worth millions of euros due to these restrictions.
What Are Rare Earths and Why Are They So Important?
Backbone of Modern Technology
Rare earth elements are special minerals used in almost every modern industry. Examples include:
Neodymium – used for making powerful magnets.
Lanthanum – essential for camera lenses and batteries.
Europium – critical for LED screens and lighting.
Dysprosium – used in wind turbines and EV motors.
Without rare earths, modern technology would struggle to function. Smartphones, computer chips, wind turbines, electric vehicles, and even space technologies all rely on them.
Global Dependency
China controls around 60–70% of rare earth mining and processing worldwide. Not only do they extract raw materials, but they also dominate the refining and final product stage. This heavy dependence means that even a small policy change in China can disrupt industries across the globe.
China’s Grip on the Rare Earth Market
Export Restrictions and Curbs
China has imposed stricter export rules on rare earths, making it difficult for foreign companies to access raw materials. This leads to production delays and rising costs.
Quota System
China maintains a quota system for rare earth production and processing. In other words, the government decides exactly how much will be produced or exported. By limiting supply, China can influence global prices and put competitors under pressure.
Imported Raw Materials Also Under Control
China has also extended this quota policy to imported raw materials, tightening the global supply chain even further.
Impact on Businesses and the Role of the European Chamber of Commerce
Losses Worth Millions
According to the European Chamber of Commerce, at least one large European company has suffered multi-million euro losses because of China’s export restrictions.
Broader Industry Impact
It’s not just one company—industries such as electronics, automotive, and defense are facing:
Rising production costs,
Slowed innovation,
Urgent need to find alternative suppliers.
But since alternatives are limited, companies are forced to spend more time and money to secure materials.
Global Supply Chain and Geopolitical Implications
Supply Chain Disruption
As the world’s largest supplier, China can disrupt the global supply chain simply by reducing quotas. Countries in Europe, America, and Asia often struggle to find replacements quickly, which directly affects technology and green energy projects.
Geopolitical Leverage
China uses rare earths not just as an economic tool but also as a geopolitical weapon. For instance, if the U.S. or Europe applies diplomatic pressure, China can cut exports, strengthening its bargaining power.
What Could Be the Alternatives?
New Mining Sources
Countries like Australia, Canada, India, and several African nations are investing in new rare earth mining projects. However, competing with China’s scale remains a challenge.
Recycling Technology
Research is underway to recycle rare earths from old electronics and batteries. If scaled effectively, this could reduce dependency on new mining.
Policy Changes
The European Union (EU) and the United States are working on building strategic reserves and boosting domestic supply chains to reduce reliance on China.
Future Challenges
If China continues to dominate rare earths, several major global challenges may arise:
Green energy projects may slow down,
Electric vehicle (EV) prices could rise,
Defense industries may face development hurdles,
Developing nations may struggle to access advanced technologies.
Frequently Asked Questions (FAQ)
Q1: Why are rare earths so important?
Because they are used in almost every modern technology—smartphones, EVs, batteries, chips, and defense equipment.
Q2: How much of the world’s rare earths does China control?
Around 60–70% of global production and processing.
Q3: What is the impact on European companies?
Rising production costs, disrupted supply chains, and losses worth millions of euros.
Q4: Which countries are working on alternatives?
Australia, Canada, Africa, India, and the U.S. are all exploring new mining and recycling options.
Q5: What could happen in the future?
Without reducing China’s dominance, green energy and technology sectors could face serious crises.
Conclusion
China is using its control over rare earths not just for economic purposes but also as a geopolitical weapon. This has already caused significant financial damage to companies, with at least one European company losing millions of euros.
For the world, the biggest challenge ahead is how to break free from this heavy reliance on China and build alternative supply chains. Without this shift, industries ranging from renewable energy to defense could face major disruptions in the near future.
Click on the link for more details.
https://www.cnbc.com/2025/09/17/china-rare-earths-curbs-hit-europe-businesses.html
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