In April 2025, China put export controls on seven heavy rare earth elements. Within weeks, some automakers were cutting utilization or halting lines. The cars were not short of steel or glass or labour. They were short of magnets — small, dark discs of neodymium, praseodymium, dysprosium, and terbium that make an electric motor turn and a missile guidance system hold its course. The shortage did not come from a mine running dry. It came from a factory, thousands of miles away, that the rest of the world had quietly allowed to become the only one that mattered.
The numbers behind that moment are worth setting out plainly, because they are the numbers every critical-minerals investor now has to carry in their head. For the four magnet rare earths the International Energy Agency tracks, China mined about 60% of global output in 2024. That is a strong position. What follows is a dominant one: China accounted for about 91% of separation and refining production, and about 94% of sintered permanent magnet production. The mine is the least concentrated stage of the chain. The chemistry after the mine is the most concentrated — and concentration is what turns a supply chain into a lever.
The lever has already been pulled more than once. China introduced a traceability and quota regime under its Rare Earth Management Regulations in April 2024, then the export controls on seven medium and heavy rare earths in April 2025, and in October 2025 a broader package that included a one-year suspension of rare earth magnet technology and equipment exports. Each step was aimed further down the chain, at the processing and the know-how rather than the ore. The lesson for anyone financing a new mine is uncomfortable: a deposit that ships its concentrate to China for refining is not an independent supply chain. It is a Chinese supply chain with a foreign front door.
The price history of the last three years makes the same point from the other side. Lithium demand rose about 30% in 2023 and by nearly 30% again in 2024, yet lithium spot prices fell 75% in 2023 as new supply arrived faster than demand could absorb it, and cobalt, nickel, and graphite prices fell 30–45% over the same period. By early November 2026, battery-grade lithium carbonate in China was trading at about 93,500 yuan a tonne, down from about 97,000 yuan a week earlier, and Citigroup had cut its two-year lithium price forecast by up to 40%, to $12,000 a tonne. Albemarle, the world's largest lithium producer, reported full-year 2024 net sales of $5.4 billion and a net loss of $1.2 billion, and cut its 2025 capital spending to $700–800 million from $1.7 billion in 2024. Demand growth and price collapse arrived together. In this market, being right about demand is not the same as being right about price.
The consolidation the downturn forced is part of the story too. Piedmont Lithium and Sayona Mining signed a definitive merger agreement in November 2024 to create what the companies described as the largest current lithium producer in North America, renamed Elevra Lithium, built around the North American Lithium operation that produced more than 190,000 tonnes in 2024. Mergers like that are what a price collapse buys: fewer, larger producers, and a sector that comes out of the trough with its capital concentrated in the hands that survived it.
None of this means the diversification effort is failing. It means the honest measure of it is not tonnes mined but tonnes refined outside China. The IEA sees China's share of rare earth refining falling from 91% in 2024 to about 85% in 2025 and roughly 70% by 2035, led by light rare earths — and it warns that even that progress may only move the bottleneck, since announced Western magnet capacity would cover only about a third of expected non-Chinese mined supply by 2035, against about two-thirds for refining. The chokepoint is moving down the chain, not disappearing.
The implication for capital is to stop funding the hole in the ground and start funding the chemistry after it. A mine is the cheapest part of independence and the easiest to finance. Separation plants, solvent extraction, metallization, and magnet sintering are where the expertise is scarce, the capital is heavy, and the returns — for the financiers who get there first — are largest. The next decade of critical-minerals finance will be won by whoever understands that the mine was never the hard part.
Sources: International Energy Agency, Rare Earth Elements: Pathways to secure and diversified supply chains (April 2026): China about 60% of magnet rare earth mining, about 91% of separation and refining, about 94% of sintered permanent magnet production in 2024; China's share of refining seen falling to about 85% in 2025 and roughly 70% by 2035; announced Western magnet capacity covering only about a third of expected non-Chinese mined supply by 2035, as summarized at https://www.raremetalblog.com/china-rare-earth-metals/ and https://www.jacksonholeinstitute.org/post/rare-earths-china-s-chokepoint-and-wyoming-s-opening. China export controls on seven medium and heavy rare earths (April 2025) and automaker utilization cuts, per the IEA Global Critical Minerals Outlook 2026 as reported by Industrial Info Resources, https://www.industrialinfo.com/news/article/iea-global-critical-minerals-risks-became-realities-in-2025--360418. IEA Global Critical Minerals Outlook 2024: lithium spot prices down 75% in 2023; cobalt, nickel, and graphite down 30–45%; lithium demand up 30% in 2023, https://www.iea.org/reports/global-critical-minerals-outlook-2024/executive-summary. IEA Global Critical Minerals Outlook 2025: lithium demand up nearly 30% in 2024; nickel, cobalt, graphite, and rare earths up 6–8%, https://www.iea.org/reports/global-critical-minerals-outlook-2025/executive-summary. Lithium carbonate China: SMM average 93,500 yuan per tonne on November 2, 2026, https://news.metal.com/newscontent/104193146-smm-lithium-carbonate-daily-review-spot-lithium-carbonate-prices-edged-down-by-100-yuanmt-on-nov-2-with-strong-wait-and-see-sentiment-on-the-first-day-of-the-month; InfoLink 97,000 yuan per tonne on October 28, 2026 and Citigroup forecast cut to $12,000 per tonne (November 2, 2026), https://www.indexbox.io/blog/citigroup-cuts-lithium-price-forecasts-by-up-to-40-on-slower-battery-demand/. Albemarle full-year 2024 results (February 12, 2025): net sales $5.4 billion; net loss $1.2 billion; 2025 capital expenditures $700–800 million versus $1.7 billion in 2024, https://investors.albemarle.com/news-and-events/news/news-details/2025/Albemarle-Reports-Fourth-Quarter-and-Full-Year-2024-Results/. Piedmont Lithium / Sayona Mining definitive merger agreement (November 19, 2024) and North American Lithium production of more than 190,000 tonnes in 2024, https://announcements.asx.com.au/asxpdf/20250508/pdf/06jk3qh832p5x9.pdf.