The rare earth war between the United States and China has officially begun. China announced that it will expand export controls on rare earth minerals starting in December, requiring products containing more than 0.1% of Chinese rare earth ingredients to obtain a license before exporting, and simultaneously prohibiting the export of any materials or components that can be used for military equipment. In response, the United States regarded this as a national security threat and launched a $1 billion rare earth strategy to accelerate de-Chinaization, driving US rare earth concept stocks to soar by 24%~65% in recent days
China expands controls on rare earths
Rare earth is a general term for 17 chemical elements, including scandium, yttrium, and lanthanide elements. Among them, scandium and yttrium often coexist with lanthanide elements in mineral deposits and have similar chemical properties. They are considered rare earth elements and are divided into light rare earths and heavy rare earths. Heavy rare earths are more expensive than light rare earths, and there is a huge price gap between the two.
China this year 4 In September, it was announced that the key materials for the production of high-efficiency motors would be controlled, including seven medium and heavy rare earth metals: samarium, chromium, phosphorus, dysprosium, phosphorus, scandium and yttrium. This time, the newly added controls include five medium and heavy rare earth metals, alloys and related products of europium, 鈥, erbium, 銩 and ytterbium. Currently, only five rare earth metals of lanthanum, cerium, phosphorus, neodymium and ytterbium are left, which have not yet been controlled by China.
China announced that it will expand export controls on rare earth minerals starting in December, requiring products containing more than 0.1% of Chinese rare earth components to obtain a license before exporting. It will review case-by-case end-uses involving logic chips below 14 nanometers, storage chips above 256 layers, and related semiconductor production and testing equipment. It will also ban the export of military equipment materials, including small high-power electric motors used in missiles and fighter aircraft.
China ranks first in rare earth productionAccording to data released by the United States Geological Survey (USGS) in January 2025, in terms of global reserves, the total global reserves of rare earth resources in 2024 will be approximately 90 million tons. China has 44 million tons of reserves, Vietnam has 3.5 million tons, Brazil has 21 million tons, and Russia has 3.8 million tons. The four countries together account for 79% of global reserves.
From the perspective of global production, global rare earth production in 2024 will be 390,000 tons, China's production will be 270,000 tons, accounting for 69.2% of the total global production, and the remaining production of the United States will be 45,000 tons, Australia's output will be 13,000 tons, and Myanmar's output will be 31,000 tons. The four countries will account for 91% of global rare earth production in 2024. It is obvious that the concentration of global rare earth resources is relatively high, and China's production and reserves are the first in the world.
According to the U.S. Geological Survey, about 70% of rare earth metals imported into the United States in the past three years came from China. Rare earths are key materials for the manufacturing of advanced technologies such as F-35 fighter jets, submarines, radars, missiles, and AI chips. Therefore, in the face of China’s expanded control of rare earth metals, the United States is using policies, funds, and military needs to drive the rapid rise of local industries.
U.S. launches rare earth strategyThe U.S. Department of Defense has launched a critical mineral reserve plan of about US$1 billion, led by the Defense Logistics Agency (DLA), to expand the "National Strategic Reserve" and accelerate the procurement of key metals such as cobalt, antimony, scandium, and tantalum. The goal is to build independent supply capabilities that can support the military industry for several months by 2027. This marks the United States' determination to shift from "passive reserves" to "active production expansion" and accelerate the de-Chinaization.
Because rare earths have unique magnetic, luminescent and electrochemical properties, they currently play a key role in the energy transition and have therefore become one of the most sought-after resources in the modern economy. JPMorgan Chase announced that it will invest US$10 billion in equity and venture capital to target areas such as defense aerospace, AI, energy technology and key minerals to assist US companies in accelerating the establishment of independent supply chains.
Permanent magnets in rare earth elements have become a key element of modern armaments because they are used in precision-guided ammunition, missile guidance systems, stealth technology and advanced communications equipment. Jeremy Siegel, an emeritus professor at the Wharton School of the University of Pennsylvania, criticized the fact that the United States does not have a strategic reserve of rare earths as a shameful national security mistake, and called for the establishment of a rare earth reserve system like the strategic petroleum reserve to avoid geopolitical strangleholds.
U.S. rare earth concept stocks soar 1. MP MaterialsMP Materials is the largest producer of rare earth materials in the Western Hemisphere and the only rare earth giant in the United States with the ability to vertically integrate mining, processing and magnet plants. After signing a rare earth magnet supply agreement with the US Department of Defense in July this year, its stock price tripled, and it also invested in special shares, effectively making the US government the largest shareholder. Since China announced the expansion of rare earth controls, it has soared by more than 30% in the past five trading days.
2. USA Rare EarthThe total demand for rare earth magnets in the United States is about 50,000 tons per year, but MP Materials plans to produce about 10,000 tons per year, so USA Rare Earth is expected to help fill the gap. It is currently preparing to build a rare earth magnet production line. CEO Hampton revealed that it is working closely with the government. The stock price has surged more than 3.5 times since July, and has soared more than 24% in the past five trading days.
3. Energy Fuels Inc.Energy Fuels owns the only operating traditional uranium processing plant in the United States. It has recently successfully trial-produced high-purity iridium oxide, and has cooperated with South Korea's Posco Steel to establish a non-Chinese source supply chain in order to establish a non-Chinese source supply chain of rare earths for the transmission systems of electric vehicles and hybrid vehicles. Its stock price has surged 3.8 times since July, and has soared more than 45% in the past five trading days..
4. NioCorp DevelopmentsNioCorp Developments is leading the development of the Elk Creek multi-mining project in Nebraska, with the goal of mining unique composite minerals such as niobium, scandium, titanium and rare earth elements. Niobium can strengthen steel needed for vehicles and infrastructure, while scandium can improve aluminum alloys for aerospace applications. The stock price has soared 4.56 times since July this year, and has soared more than 26% in the past five trading days.
5. American Resources Corp.Mainly operates the only economic-scale rare earth separation and refining facility in the United States through its wholly-owned subsidiary ReElement Technologies to solve bottlenecks in the midstream of the supply chain. Its stock price has soared more than 6 times since July, and has soared more than 65% in the past five trading days since China announced the expansion of rare earth controls.
Overall, the U.S.-China rare earth war is accelerating the reorganization of the global supply chain. Although China will always be the world's largest producer, the United States has three major advantages: policy support, technological innovation, and national defense needs. It is expected to become a major new force in the rare earth industry in the future. From mining, refining to magnet manufacturing, the United States is gradually establishing supply chain independence, and rare earths will become the core resource connecting AI, electric vehicles, and the defense industry.
JPMorgan to invest up to $10 billion in US national security as part of $1.5 trillion pledge US Military Launches Unprecedented $1bn Critical Minerals Stockpile Amid China Export Restrictions Further reading: Why can China’s rare earths dominate the world? Expert Haizhongxiong: Electric vehicles, robots, and drones are all needed China controls nearly 70% of the world’s rare earth production! A look at the top ten mining and manufacturing suppliers behind