(representative image) Rare earth samples
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REUTERS/Tuane Fernandes
China’s rare earth export curbs could put $6.5 trillion of downstream production outside the country at risk each year if fully implemented, the International Energy Agency warned in a report on rare earths and critical minerals.To address those weaknesses, the report argues that countries should work multilaterally to stockpile 11 “high-risk” materials. That would require an initial purchase of $9.2 billion and with a net annual cost of $900 million, the agency said. While the figures are “significant,” they are “quickly dwarfed” by the potential impact of supply disruptions, it said. Export curbs by countries including China, the Democratic Republic of Congo and Zimbabwe have turned the risks of supply chain concentration into reality, the IEA said. “Vast amounts of economic value depend on relatively small volumes of critical minerals, whose supply chains remain highly concentrated and are therefore vulnerable,” IEA Director Fatih Birol said in a press release. “While diversified supply can come at a higher cost, this can be viewed as a mineral security premium in a time of geopolitical uncertainty — a form of economic insurance against major supply risks.Rare earths emerged as a flashpoint in the US-China trade war last year, with Beijing imposing export restrictions that rattled manufacturers that rely on them in everything from satellites to smartphones. While they represent only a fraction of production costs to businesses globally, sudden price surges have the ability to disrupt manufacturing and trade.The report flagged what it saw as some improvements in supply chain diversification, saying that governments were beginning to take a more active role in the expansion and diversification of critical mineral supplies. It also said investments by the US and Malaysia in rare earth refining helped reduce China’s share of supply from 90% to 85%, which could fall to 70% by 2035 “if planned projects come online as scheduled.”However, the report flagged that broadly, the geographic concentration of mineral supply chains has increased, particularly for refining. In nickel, where Indonesia is the top refiner, and for other key energy minerals, where China is the top refiner, the two countries represented more than three quarters of total growth in refined supply.More stories like this are available on bloomberg.comPublished on July 16, 2026
