Report: Rare Earth Elements as a driver for Current and Future Conflict

Summary

Global supply chains for rare earth elements (REE) are under significant strain due to China’s export controls, geopolitical conflicts and rising demand for green technologies. The US and EU are accelerating efforts to diversify supply, increase domestic production, and boost recycling, but face challenges in meeting ambitious targets. Market volatility and regulatory uncertainty continue to impact manufacturers and downstream industries.

Recent developments

The Chinese Ministry of Commerce (MOFCOM) recently announced new export restrictions ahead of a planned meeting between US President Donald Trump and Chinese President Xi Jinping. Both nations have been engaged in trade negotiations to ease tensions following a series of reciprocal tariffs earlier this year, some of which were later reduced. REE remain a significant point of leverage for China in its dealings with the US.

In its “announcement No. 61 of 2025,” China revealed it would expand export controls to include five additional REE—holmium, erbium, thulium, europium, and ytterbium—on top of the seven elements already restricted since April. These additional elements are especially critical in the production of dual-use (military-civilian) technology, ranging from wind turbines to fighter jets.

To put the new export rules in perspective: of the 17 REE, China now restricts exports of 12. The new measures also cover specialized equipment used for refining REE. Most of these rules will take effect on December 1. Under the new policy, foreign and domestic companies must secure special approval from Beijing to export rare-earth magnets and certain semiconductor materials containing at least 0.1% heavy REE (HREE), a specific group of elements with higher atomic numbers within the REE grouping.

China’s dominance in the rare-earth sector has long been a concern for the US and other countries, but worries intensified after Beijing’s export controls in April. Those earlier restrictions affected the supply of samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium, requiring export licenses for companies shipping these materials and finished products abroad. This announcement followed similar controls imposed in February on certain elements, including tungsten and bismuth.

The US increased domestic rare earth production to 45,000 metric tons in 2024 but still relies heavily on imports for refined materials and magnets. Recent US tariffs on Chinese goods and federal investments aim to build a more resilient supply chain, but progress is slow. The EU enacted the Critical Raw Materials Act (CRMA) in May 2024, setting targets to mine 10%, process 40% and recycle 25% of its annual needs by 2030. It also launched 47 different projects to diversify supply and reduce dependency on specific countries. The CRMA encourages circularity, strategic reserves, and joint purchasing mechanisms to protect the EU from future supply shocks.

The global demand for REE is rising, driven by the shift toward renewable energy and electric vehicles. According to the World Meteorological Organization (WMO), investment in renewable energy must triple to achieve net-zero emissions by 2050. By 2030, the energy transition will require three times more copper, lithium, nickel, cobalt, and other materials compared to current levels. To meet these net-zero targets, an additional 50 lithium mines, 60 nickel mines, and 17 cobalt mines will need to be opened.

Rare earth elements in current conflict zones

Ukraine

Ukraine possesses significant deposits of REE, accounting for approximately 5% of the world’s reserves, even though the country covers only 0.4% of the Earth’s surface. These materials—including lithium, cobalt, scandium, graphite, tantalum, and niobium—are essential for manufacturing devices used in green energy technologies. However, access to these resources is currently affected by ongoing conflict, making their development both challenging and crucial for Ukraine and its international partners. Key resource sites, such as Kruta Balka in Donetsk and Shevchenkivske in Zaporizhzhia, are currently under Russian occupation.

Myanmar

Myanmar's Kachin State, rich in REE like dysprosium and terbium, has become a focal point of conflict. Since the 2021 military coup, the Kachin Independence Army (KIA), an ethnic armed group, has taken control of key mining areas, including Chipwi and Pang War. These regions have seen a surge in mining activities, with over 370 active sites by the end of 2024. The KIA then closed all but about 10 of the REM mining sites again in October 2024. However, the rapid expansion of mining operations has led to severe environmental degradation, including deforestation and river pollution, impacting local communities and ecosystems. Additionally, the KIA had implemented taxation on mining activities, further complicating the region's economic and political landscape. REE are reportedly being smuggled into China through unofficial routes now.

Madagascar

In Madagascar, the Steenkampskraal and Ampasindava sites are rich in heavy REE such as neodymium and dysprosium, elements essential for magnets in renewable energy technologies and electronics. Despite the economic potential, local communities have repeatedly protested mining operations. Their concerns focus on deforestation, water contamination, and the displacement of farmland, with several projects experiencing delays or legal challenges due to disputes over land rights and environmental protection. This tension exemplifies how local resistance can effectively shape the trajectory of resource extraction in resource-rich but economically vulnerable regions.

Greenland

Similarly, Greenland has emerged as a point of contention over its Kvanefjeld project, which contains large deposits of REE, alongside uranium, although the project remains undeveloped. Nevertheless, indigenous Inuit communities and environmental groups have voiced strong opposition to the mining project, highlighting the risks associated with both radioactive waste as well as the extraction of REE, which carry high environmental and health risks and would disrupt the traditional livelihood of Inuit communities. The Greenlandic government faces the delicate challenge of balancing economic development and international investment interests against environmental safety and indigenous rights.

Brazil

In Brazil, the Minas Gerais region, particularly around Araxá, is home to niobium and rare earth deposits. Mining in these areas has provoked concerns among local populations and environmental organizations over tailings contamination, deforestation, and water pollution. Legal disputes and community protests have slowed some projects, illustrating the persistent tension between resource extraction and environmental stewardship in countries with comparatively strong legal frameworks and active civic engagement.

Vietnam

Vietnam has also experienced localized disputes in regions such as Lai Chau and Lam Dong, where deposits of monazite and bastnäsite are present. Farmers and indigenous groups in these areas have resisted mining operations due to fears of environmental degradation and the loss of agricultural land, which highlights the recurring theme of conflicts between mining interests and local livelihoods in emerging economies.

DRC

In the Democratic Republic of Congo, the rare earth issue is intertwined with broader conflicts over cobalt and other valuable elements. While cobalt dominates the discourse, some REE occur alongside these deposits. In certain regions, artisanal miners and armed groups exploit these resources, fueling low-intensity conflicts, human rights abuses, and environmental harm. The informal and sometimes illicit nature of this extraction complicates governance and exacerbates local instability.

Looking ahead

Between 2025 and 2030, REE supply chains are expected to be shaped by several major geopolitical and economic conflicts. The rivalry between the US and China is intensifying, with China’s broad export controls on REE and related technologies, and the US imposing tariffs as high as 130% on selected Chinese imports. These actions have escalated trade tensions and are increasingly used as strategic tools, especially targeting defense supply chains and advanced manufacturing. As a result, US and NATO defense industries, which depend on Chinese-origin REE for critical systems like fighter jets and missiles, face significant supply bottlenecks. China’s new licensing rules now specifically block exports to foreign militaries, raising the risk of direct disruptions in future crises. NATO countries are trying to boost domestic production and stockpiling, but full independence from foreign sources remains years away. The US is also pressuring allies such as Ukraine and Australia for access to alternative supplies, sometimes linking security guarantees to mineral deals.

In Europe, tensions with China are also high. The EU remains heavily dependent on China for REE imports, with some elements sourced almost exclusively from Chinese suppliers. China’s export controls have already caused production delays in European industries, particularly in automotive and green technology sectors. In response, the EU is working with the US and G7 to counter China’s restrictions through joint projects and efforts to diversify supply chains. However, progress is slow, and the risk of future supply shocks remains significant. Delays in rare earth supply threaten the EU’s climate and energy goals, and could spark internal disputes over resource allocation and industrial priorities.

Ukraine and Eastern Europe present another flashpoint. Ukraine’s large reserves of REE have recently become a point of contention with Trump’s return to the White House. Control over these resources is likely to remain contentious, with Russia seeking to retain occupied, resource-rich territories. The US and EU have offered mineral deals with Ukraine, with the US even trying to coerce Ukraine into allowing resource access in exchange for military aid. However, most deposits are located in conflict zones, and extraction is limited by war and infrastructure damage, creating a high-risk, low-reward scenario for Western supply chains. As global competition intensifies, resource-rich regions like Ukraine could see renewed or prolonged conflict, driven by the strategic value of elements rather than purely territorial disputes.

Asia and Africa are emerging as new frontiers, but also new sources of risk. China continues to dominate mining and processing in Asia and is expanding its influence in Africa and Central Asia through the Belt and Road Initiative (BRI) and bilateral deals. This increases the risk of “resource diplomacy” turning into economic coercion or proxy conflicts. Countries such as Burundi, Myanmar, and Vietnam are ramping up production, but face political instability, weak governance, and the risk of foreign intervention. Africa’s mineral wealth is central to future supply chain battles, with both China and the West vying for control. Rapid expansion of mining in fragile regions could trigger local conflicts over land, water, and pollution, further complicating global supply chains.

Finally, the Arctic and Greenland are becoming new arenas for competition. The US, EU, UK, and China are all seeking access to Greenland’s REE, but environmental and indigenous rights concerns add complexity. As the Arctic melts, new resource frontiers are opening up, but so are new geopolitical tensions.

Conclusion

In summary, the next decade will likely see resource conflicts shift from traditional military confrontations to economic, technological, and proxy battles over supply chain control. Rare earths and strategic elements are now central to national security, green transitions, and global power dynamics, with regions like Ukraine, Africa, and even the Arctic at increased risk for future conflict, while US–China and EU–China tensions continue to drive global supply chain instability.

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