Goldman says China’s dominance in rare earths is hard to challenge
(MENAFN) Goldman Sachs has warned that Western nations may need up to ten years to catch up with China in the rare earths sector, a critical component for modern technology, according to reports. The minerals remain a focal point in trade tensions between Washington, the EU, and Beijing.
China currently dominates over 90% of global rare-earth refining and 98% of magnet production, according to industry analysts and the International Energy Agency. While it extracts roughly two-thirds of the world’s rare-earth ore, it also controls the processing and manufacturing stages that turn the raw materials into usable components.
“It’s going to take years to build up independent supply chains in the West,” said Daan Struyven, Goldman’s co-head of global commodities research, during a podcast. He estimated it could take around a decade to develop a mine and about five years to construct a refinery.
China has recently tightened its control over rare-earth exports, citing national security and the need to protect strategic resources. In April, it imposed restrictions on several elements used in military applications, and earlier this month, it expanded the rules with stricter licensing and extraterritorial provisions, especially affecting shipments linked to US defense and semiconductor industries.
Analysts see these measures as a response to US restrictions on advanced semiconductors and chipmaking equipment since late 2022, which included the seizure of a Chinese-owned chip plant in the Netherlands under US pressure. The policies aim to prevent China from developing high-end chips that could enhance military and AI capabilities.
US President Donald Trump has described the situation as “effectively a trade war” and threatened to impose an additional 100% tariff on Chinese goods starting in November, while China has vowed to “fight to the end.”
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