Overview
- China currently controls a large share of global refining and processing for rare earths and related minerals, giving it leverage over supplies for batteries, semiconductors and defense systems.
- Washington and partners have stepped up measures that include diplomatic outreach, proposals for a privileged trading bloc and a $10 billion seed idea for strategic stockpiles to diversify supply sources.
- The U.S. is also funding domestic capacity building through programs like the University of Utah–DARPA SMART testbed to speed up extraction, separation and industrial validation of critical materials.
- Countries with untapped deposits such as Pakistan face a strategic choice between existing ties with China and new Western investment offers that would shift supply chains outside Chinese processing networks.
- If processing capacity moves to allied jurisdictions, the short-term effect will be higher costs and more project work at mines and plants, while the longer-term effect could be more resilient supply chains for clean energy and defense technology.