TECH

China suffers setback from the US and Europe, and control of rare earths begins to change

For decades, the global rare earth supply chain seemed like immutable territory. A single hub concentrated production, processing, and technology, while the rest of the world accepted dependence as an inevitable cost of progress. This scenario has begun to change silently. Political pressures, industrial risks, and recent strategic decisions are accelerating a reconfiguration that few imagined possible—and that could alter the future of technology, energy, and heavy industry.

The invisible link that sustains modern technology...Few people see it, but almost everything depends on them. Rare earth magnets are at the heart of electric motors, wind turbines, electric vehicles, smartphones, drones, defense systems, and medical equipment. They are small but irreplaceable components for energy efficiency and technological miniaturization.

The problem has never been just the extraction of these elements, but the control of the subsequent steps: refining, chemical separation, and manufacturing of high-performance magnets. Over the years, this know-how became concentrated in a single country, creating a structural dependency that went unnoticed while supply chains functioned without shocks.

This balance began to crumble when trade tensions, export restrictions, and diplomatic disputes transformed a technical issue into a strategic one. Suddenly, governments and companies realized that the energy and digital transition depended on an extremely fragile bottleneck.

The reaction didn't happen overnight. Plans had been shelved for years, but 2025 acted as a catalyst. The combination of successive warnings and geopolitical instability accelerated decisions that previously seemed expensive, slow, or politically sensitive. The focus shifted from short-term efficiency to long-term industrial security.

In this new context, the United States, the European Union, and strategic partners like Australia began to coordinate industrial policies: direct subsidies, regulatory support, public funding, and incentives to reindustrialize critical parts of the rare earth supply chain.

The most visible change didn't happen in speeches, but on the factory floor. In recent months, industrial projects have begun to move from the planning stage to reality, especially in Europe, where external dependence has become a central political issue. A new rare earth magnet production plant in the north of the continent has come to symbolize this strategic shift.

The project does not promise to replace the former global leader, at least not in the short term. The objective is different: to create redundancy, reduce vulnerabilities, and gain room for maneuver. Instead of breaking with the existing system, the bet is to dilute risk, creating alternative poles capable of supporting critical sectors in times of crisis.

Companies specializing in advanced materials have unexpectedly taken center stage on this chessboard. For years, they operated behind the scenes of the industry. Now, they have become key players in a broader geopolitical strategy. Their executives recognize that the demand does not come from a single sector, but from virtually any technology that needs to convert energy efficiently.

This cross-cutting nature changes everything. It's not just about electric cars or renewable energy, but about the basic infrastructure of the modern economy. Therefore, governments have begun to treat rare earth magnets in the same way as semiconductors: as strategic assets, not as mere commodities.

Even so, no one is talking about total independence. The dominance accumulated over decades does not disappear quickly. Complex supply chains require time, scale, and highly specialized human capital. What is at stake is a new equilibrium—less concentrated, more resilient, and politically predictable.

This movement is already beginning to influence investment decisions, trade agreements, and industrial strategies. For the first time in a long time, the almost absolute control of this market faces concrete, albeit partial, alternatives. And this, in itself, is already a game-changer.

The scenario that is emerging is not one of abrupt replacement, but of a gradual redistribution of power. A silent, technical, and slow process—exactly the type of change that usually goes unnoticed until its effects become impossible to ignore.

mundophone