China dominates global rare earth magnet supply chain

China maintains a dominant position in the global rare earth supply chain, particularly in downstream manufacturing. While China produces approximately 70% of the world's mined rare earths, its control is most concentrated in the separation, refining, and magnet production stages. In 2024, China accounted for roughly 91% of global separation and refining and 94% of sintered permanent magnet production.

Companies such as JL Mag Rare Earth are expanding their capabilities from basic magnets for wind turbines and air conditioners into more sophisticated components used in robotics and high-tech industries. This vertical integration creates a moving target for Western nations attempting to build independent supply chains.

In response, the United States and its allies are treating mineral sovereignty as a matter of national security. The U.S. Department of Commerce invested $1.6 billion in USA Rare Earth in January 2026, gaining a significant equity stake. Additionally, the U.S., Denmark, and Greenland have established a security framework to expand American military access and restrict adversarial investment in critical minerals. These efforts aim to mitigate the economic and security risks posed by Beijing's potential use of export curbs as geopolitical leverage.