China will retain its dominance in rare earths

Significance

As tensions build between Beijing and Western governments, Beijing may increasingly be tempted to weaponise its dominance. It could limit supplies in response to sanctions and prohibitions of technology exports to China.

Impacts

• Costs will rise as duplicate supply chains emerge for non-economic reasons.
• Like-minded countries will explore their own deposits and potential for alternative processing plants.
• China may seek to shift away from rare earth exports to higher-value products based on them.