China’s rare earth export controls could expose $6.5 trillion of production outside the country to supply shocks, the International Energy Agency warned on Thursday, highlighting how small volumes of strategic minerals can threaten large parts of the global economy.
China Controls Key Mineral Supply Chains
China, the world’s dominant rare earth processor, expanded export controls in October to cover more materials and to impose stricter licensing requirements, but later delayed full implementation for a year. Rare earths comprise 17 metals used in cars, aircraft, electronics, weapons systems, wind turbines and data centers. Reuters reported that the U.S. and Europe would face nearly half of the potential economic impact.
"Our latest analysis shows that vast amounts of economic value depend on relatively small volumes of critical minerals, whose supply chains remain highly concentrated and are therefore vulnerable," IEA Executive Director Fatih Birol said.
The IEA said automotive production faces the largest direct exposure, at more than $3 trillion outside China, followed by electronics and transport. It said full graphite controls could put another $300 billion at risk because China produces more than 90% of processed graphite.
