In the 21st century, control over physical resources is no longer just about oil, gas, or food. It is about the invisible minerals that make modern life and modern warfare possible.

Among them, rare earth elements (REEs) — a group of 17 metallic elements — are arguably the most strategic. They form the backbone of advanced technologies that power everything from smartphones and electric vehicles to guided missiles, satellites, and fighter jets.

Today, China dominates more than 90% of global rare earth refining and over 80% of the production of advanced materials derived from them, such as permanent magnets and phosphors.

This reality has profound implications for national security, economic sovereignty, and geopolitical balance, particularly for nations whose defense systems, industries, and digital infrastructure depend on a supply chain controlled by a strategic rival.

Rare earth dependence is not simply a trade issue — it is a matter of national survival, affecting a country's ability to defend itself, innovate, and maintain political independence in an era of global power competition.

1. The Strategic Role of Rare Earths

Rare earth elements are indispensable in national defense and high technology. Their unique magnetic, luminescent, and conductive properties enable miniaturization, precision, and energy efficiency — traits essential in advanced systems.

• Neodymium, praseodymium, dysprosium → critical for high-performance permanent magnets used in missile guidance systems, stealth aircraft actuators, and naval propulsion.

• Yttrium and europium → vital for targeting lasers, night vision, and radar screens.

• Samarium-cobalt alloys → used in high-temperature magnets for aircraft engines and nuclear applications.

• Lanthanum and cerium → important for battery electrodes and catalytic converters.

Without access to refined REEs, even the most technologically advanced militaries would face severe setbacks in production, readiness, and maintenance of their defense systems.

This technological dependency transforms what seems like an economic issue into a national security vulnerability. When one country — in this case, China — controls the majority of global refining capacity, it effectively controls a portion of its rivals’ defense capabilities.

2. Economic Dependence as Strategic Exposure

Dependence on a foreign power for critical materials means losing a measure of sovereign control over national decision-making. For example, a country might hesitate to take a firm geopolitical stance if it risks losing access to essential supplies that sustain its military-industrial base.

In economic terms, rare earth dependence functions as a strategic chokepoint. It mirrors historical energy dependencies — like Europe’s reliance on Russian gas — but with even deeper implications because rare earths are embedded in every sector of the digital and defense economy.

Consider these examples:

• The United States imports nearly all of its refined rare earth materials, even though it mines some domestically. The ores from the Mountain Pass mine in California are still sent to China for processing.

• The European Union classifies rare earths as “irreplaceable inputs” for its green transition, defense projects, and communications networks.

• Japan and South Korea, heavily dependent on rare earth magnets for electronics and vehicles, faced immediate production crises during China’s 2010 export restrictions.

Each of these cases illustrates how supply dependence can translate into geopolitical vulnerability. A nation may possess military might, but without the materials to build or maintain critical systems, that power becomes hollow.

3. Erosion of Industrial Sovereignty

True sovereignty is not only political — it is technological and industrial. When nations lose the ability to refine, process, or produce their own critical materials, they cede part of their industrial autonomy.

During the 1980s, the U.S. and other Western nations had thriving rare earth industries. However, environmental regulations, market liberalization, and short-term corporate thinking led to outsourcing refining to China. Beijing seized the opportunity, offering cheaper production through state subsidies and lax environmental standards. Over time, China not only captured the market but also mastered the technology and built entire value chains — from mining to magnet manufacturing to final assembly in high-tech devices.

This outsourcing has eroded the strategic industrial base of Western economies. The consequences go beyond trade imbalances. It means:

• Diminished control over quality and supply stability.

• Loss of technical expertise in refining and metallurgical chemistry.

• Long-term dependence on foreign technology for critical defense applications.

In essence, a nation without industrial independence cannot exercise full strategic sovereignty. It must operate within the constraints of another power’s supply conditions, pricing, and policies.

4. National Security Risks: From Vulnerability to Leverage

Dependence on Chinese rare earth refining introduces a range of national security risks that go beyond supply shortages.

a. Supply Chain Disruption

A sudden cutoff — whether from political tension, trade retaliation, or military crisis — could paralyze production of weapons, sensors, and communication equipment. Defense industries, already burdened by complex logistics, could face cascading delays and shortages.

b. Strategic Coercion

China has demonstrated its willingness to use rare earths as a diplomatic weapon. In 2010, amid tensions with Japan, Beijing informally halted rare earth exports to Japanese firms. The same playbook could easily be applied to Western nations in the event of sanctions, arms sales to Taiwan, or naval confrontations in the South China Sea.

c. Intelligence and Quality Risks

Relying on Chinese-processed materials also raises concerns over supply chain integrity — including the possibility of compromised materials, inferior substitutes, or embedded vulnerabilities that could affect performance or safety in defense equipment.

d. Economic and Psychological Leverage

Even without an outright embargo, the threat of disruption can shape national behavior. Dependence creates a form of psychological deterrence — influencing how countries vote in international forums, form alliances, or enforce sanctions. This is a subtle but powerful form of strategic influence.

5. Rare Earths as a Test of Strategic Foresight

China’s dominance did not happen overnight; it was the result of decades of patient industrial strategy. The West, in contrast, pursued short-term efficiency over long-term resilience. The result is a strategic asymmetry where one side holds the material foundation of the other’s technological power.

Rare earth dependence reveals a larger truth: sovereignty in the modern age depends on control over supply chains, not merely territorial defense. Cybersecurity, energy security, and materials security are now interlinked pillars of national survival.

If a nation cannot secure the inputs for its defense industry, green technology, or digital infrastructure, its sovereignty becomes conditional — vulnerable to disruption, manipulation, or technological stagnation.

6. Restoring Sovereignty: Pathways to Independence

To regain control and reduce vulnerability, nations must pursue a multi-pronged strategy:

• Rebuild domestic refining capacity.
  Countries like the U.S., Australia, and Canada are investing in refineries and magnet plants. The challenge is scaling economically while meeting environmental standards.

• Diversify global supply chains.
  Partnerships with resource-rich regions such as Africa, Latin America, and Southeast Asia can create alternative refining hubs — provided local nations benefit equitably.

• Invest in recycling and circular economies.
  Urban mining — extracting REEs from e-waste — can reduce dependence on new extraction and foreign processing.

• Develop substitutes and innovations.
  Research into non-rare-earth materials or magnetic alternatives can weaken the monopoly over time.

• Strategic stockpiles and defense cooperation.
  NATO and allied nations could coordinate rare earth reserves just as they do with oil, ensuring collective resilience against disruptions.

Each of these measures requires long-term commitment, public-private coordination, and political courage — qualities often sacrificed to short-term market logic.

7. Sovereignty in the Age of Materials

Rare earth dependence exposes the fragile underbelly of modern power. A nation may possess advanced weapons, thriving tech companies, and diplomatic influence — yet still be strategically dependent on a foreign supplier for the very materials that make those achievements possible.

In this sense, rare earths represent more than an industrial commodity; they symbolize the new currency of sovereignty. Control over them determines who can innovate, defend, and lead in the technological age.

To secure true independence, nations must look beyond the convenience of global markets and reassert control over the physical foundations of power. In the 20th century, sovereignty was defended with armies and borders. In the 21st century, it will also be defended with supply chains and smelters.