China's stranglehold on rare earths must be ended, according to a mining company executive hoping to supply the European Union within two years. Rafael Moreno, managing director of Australia-listed Viridis Mining and Minerals, called it "paramount" to break Beijing's grip on the raw materials used in everything from cars to wind turbines and military jets. His comments come as Donald Trump and Xi Jinping prepare for their second summit of the year on Thursday.
Why China's Rare Earths Stranglehold Threatens Global Markets
China first introduced controls on rare earth exports in April 2025, hitting auto industries in the EU, UK, US, and Japan hard. After a summit last October with Trump in South Korea, Xi agreed to suspend even stricter global restrictions, but only for 12 months. Industry leaders had hoped Trump would seal a deal to extend the suspension at the two leaders' last summit in May, but the question remains hanging over next week's meeting.
Find Bleeding Edge Supplements at Scandalous Prices on iHerb.
"The market is nervous," Moreno said. "It cannot not be extended if they are to continue to have these presidents' meetings regularly," added Kurt Tong, managing partner of the Asia Group, a Washington strategic advisory firm. However, he noted a suspension deal could be delayed until November.
How New Suppliers Plan to Break the Chokehold
Viridis Mining and Minerals, with assets in Brazil, Australia, and Canada, aims to supply the EU with rare earths in two years. The company's push reflects a broader Western effort to diversify supply chains away from China. Rare earth elements are critical for electric vehicles, renewable energy, and defense applications.
Breaking China's stranglehold requires significant investment in mining, processing, and refining outside China. Western governments have ramped up subsidies and partnerships to accelerate these projects. Yet, challenges remain, including permitting delays, environmental concerns, and technical expertise.
Key Takeaways
- China's rare earth export controls threaten global auto, energy, and defense industries.
- A suspension deal hangs in the balance as Trump and Xi meet.
- New suppliers like Viridis aim to supply the EU within two years.
- Diversifying supply chains is critical but faces investment and regulatory hurdles.
Comparing Rare Earth Supply Chain Risks
| Factor | China | Emerging Suppliers |
|---|---|---|
| Market Share | ~60% mining, ~85% processing | Less than 10% combined |
| Export Controls | Active since April 2025 | None |
| Production Cost | Lower due to scale | Higher, needs subsidies |
| Time to Market | Immediate | 2+ years for new projects |
The Road Ahead for Rare Earths
Ending China's stranglehold will not happen overnight. It requires coordinated efforts from governments and private sector players. The upcoming Trump-Xi summit could provide a temporary reprieve, but long-term solutions demand robust alternative supply chains.
As Moreno emphasized, the market is nervous. Until a deal is reached, uncertainty will continue to weigh on industries reliant on rare earths. For the EU, UK, US, and Japan, breaking free from China's grip is not just economic—it's a matter of national security.
FAQ
What are rare earths used for?
Rare earths are used in electric vehicles, wind turbines, smartphones, and military jets, among many other high-tech applications.
Why is China's stranglehold on rare earths a problem?
China dominates mining and processing, giving it power to restrict exports and disrupt global supply chains, as seen in April 2025.
Can new suppliers replace China's rare earths?
New suppliers like Viridis aim to supply the EU within two years, but scaling up will take time and investment to challenge China's dominance.
Browse the Shop
Acacia frida deluxe solid wood bed frame |
Bedroom bench |
Bed chest drawers |
Lingerie dresser |
Frame base |
Mirror with jewelry storage |
30 Bathroom Vanity |
Memory foam queen mattress |
Mattresses for back pain |
Nightstand set of 2 |
Grand Goldman Shop |
Civil Lawyer
Deutschland Trikot WM 2026
