New York, December 06, 2025
China has imposed strict new export controls on rare earth elements and permanent magnets effective December 1, 2025, blocking their use in foreign military applications. This development is intensifying a global scramble for critical minerals essential to advanced weapons systems, raising significant environmental and geopolitical concerns.
China’s Export Controls and Global Defense Supply Chains
China, which accounts for approximately 70% of rare earth mining and over 90% of processing and magnet manufacturing globally, now restricts exports to entities linked with foreign militaries. The Ministry of Commerce Announcement No. 61 of 2025 enforces a near-total ban on rare earth exports for military purposes, directly impacting major defense contractors worldwide. This move dramatically increases Beijing’s leverage over global defense technology supply chains.
Critical Minerals in Military Technology
Rare earth elements such as neodymium, dysprosium, and praseodymium are foundational in producing permanent magnets (NdFeB magnets) used in a wide range of military equipment. These include F-35 fighter jets, Virginia- and Columbia-class submarines, Tomahawk missiles, electronic warfare systems, drones, and precision-guided munitions. The reliability and availability of these minerals are integral to modern defense capabilities.
Global Response: Scaling Up Non-Chinese Supply
In response to China’s restrictions, the United States is aggressively expanding domestic rare earth production and processing. MP Materials is enhancing its Mountain Pass facility to handle heavy rare earth separation, supported by a $150 million loan from the Department of War’s Office of Strategic Capital. Additionally, a new U.S. magnet manufacturing plant backed by a decade-long offtake agreement is under construction. Similar efforts are underway across the European Union, Japan, Australia, and India, focusing on mining and processing in Africa, Latin America, and the Arctic, alongside strategic stockpiling to mitigate risks.
Environmental and Climate Implications
Experts warn that this accelerated military-driven mining expansion threatens global climate goals. Rare earth mining often results in deforestation, water contamination, toxic waste including radioactive byproducts, and habitat destruction. Refining and magnet production require energy-intensive processes frequently dependent on fossil fuels, potentially locking in decades of high emissions. The diversion of critical minerals from clean energy technologies such as electric vehicles, wind turbines, and solar panels to weapons production further complicates the transition to renewable energy.
Supply Chain Vulnerabilities Revealed
Recent analyses highlight severe fragility within U.S. and allied critical mineral supply chains. Inventories of neodymium, dysprosium, and NdFeB magnets are minimal, often covering just a few months of operational need. Disruptions in supply—from export restrictions, geopolitical tensions, to extreme weather—could rapidly cascade, disproportionately affecting smaller suppliers before reaching major defense manufacturers.
Geopolitical and Economic Risks
The weaponization of critical mineral supply chains intensifies strategic competition among global powers. Resource nationalism and trade conflicts are increasingly likely as nations seek security of supply. Efforts to reshore or ally-shore vital processing and manufacturing represent a shift towards reducing dependency on China but risk exacerbating market tensions.
The urgency to expand critical mineral sourcing for defense intersects precariously with environmental sustainability. Without cooperative international frameworks emphasizing transparency, recycling, and sustainable mining standards, these competing priorities risk undermining both security stability and climate objectives. Monitoring how non-Chinese rare earth projects develop under environmental scrutiny and predicting China’s next strategic moves will be central to shaping the global mineral landscape in the coming years.