Rare earths: Geopolitical risk remains at highest level in a decade
A prescient prognostication
In our 2024 annual report, we wrote the following:
“With a world-changing pandemic fresh in the rearview, an ongoing war in Europe, escalating conflict in the Middle East, uncertainty around China – Taiwan, and a years-long trade war underway, geopolitical uncertainty is at the highest level observed in over a decade.
All of the aforementioned have potential to suddenly and dramatically change the global business and trade landscape in short order, and thereby reshape the near-, medium- and long-term outlook for supply, demand, prices and more.
Amidst this looming uncertainty, the need for robust, sustainable, redundant supply chains has never been greater – evidenced by the energy supply crisis that hit Europe following Russia’s invasion of Ukraine.
Unquestionably, we are seeing more government investment, action and intent to address this need than ever before but to-date, the buildout of robust, alternative supply chains is falling dramatically short.”
One year later, it is remarkable how correct this prognostication was and amazing to look back at the massive developments that unfolded in 2025.
The need for alternative supply chains is now acute
Over the past year, geopolitical risks have not subsided – they’ve intensified with the escalating U.S. – China trade war under the second Trump administration proving the concerns we raised last year to be prescient.
China’s repeated weaponization of its near-monopoly on rare earth processing and magnets – most notably through export restrictions in April 2025 – triggered immediate market disruptions, including production halts at global auto plants and sustained price premiums for ex-China material.
The urgency for robust, sustainable, ex-China supply chains is now acute, yet despite unprecedented levels of government funding, policy support, and international partnerships – from the US DoW’s stakes in domestic producers to alliances with Australia, Canada, and emerging players – the actual buildout of diversified mining, separation, and magnet production remains slow and far short of delivering true resilience as of late-2025.
Risks, regrettably, remain at decade-high levels.
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