China Tightens Rare Earth Control; U.S. and Europe Accelerate Alternative Supply Paths

Beijing has taken significant steps in 2025 to deepen its control over rare earth output while the U.S. and EU race to build complementary supply chains, including backing projects in Greenland and internal pricing reforms.

• China issued the first batch of 2025 rare earth mining and smelting quotas quietly, excluding imports and limiting eligibility to just two state-owned firms—China Rare Earth Group and China Northern Rare Earth Group—underscoring Beijing’s tighter industry control YouTube+9Reuters+9Reuters+9Metal News+15Reuters+15Reuters+15.
• China pledged to crack down on smuggling of strategic minerals—such as gallium, germanium, tungsten, and some rare earths—employing transshipment controls and enforcement actions to curb illicit flows Reuters.
• In response, the U.S. guaranteed a minimum price of $110/kg for domestic rare earth output via DoD support of MP Materials, making magnet production at its Texas plant viable by year-end—and setting a new benchmark in ex‑China pricing The Wall Street Journal+15Reuters+15Investors.com+15.

• China remains the pivotal setter of global rare earth pricing and supply control.
• Rising enforcement and quota opacity increases risk of supply shocks—spurring international investment in alternative sources.
• U.S. and European pricing support schemes may attract investment into non-Chinese producers like MP Materials and Neo, shifting market dynamics.

• MP Materials – Only U.S. domestic rare earth miner; end-of-year magnet production supported by DoD-backed price floor strategy Reuters.
• Neo Performance Materials – Operating in Estonia and Canada, supplying ex-China permanent magnets with growing customer demand at premium pricing ($10–$30/kg over Chinese sources) Reuters.

Neodymium/Praseodymium – Backbone for magnets in EVs, wind turbines, military systems
Dysprosium/Terbium – Essential heavy rare earths for high-performance motor magnets

• Monitor developments in Chinese quota awards and enforcement patterns for strategic minerals.
• Track DoD pricing support impact on MP Materials and look for similar programs emerging in the EU.
• Follow Neo’s ramp-up and customer contracts as proof of rising willingness to pay premiums for secure supply.

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Informational purposes only and is not financial or legal advice. Information is believed accurate but not guaranteed.