Red Alert!

Extremely critical rare earth element and super magnet supply chokepoint, how EVs and wind turbines are affected, and implications for our military and investments

Rare earth element (REE) production, 1956-2010, from USGS

Rare earth supply chain broken

[This subject is a moving target. I’ll probably have to update it later. The 6/11/25 news was that the US and China had reached a new agreement, “subject to Presidents Xi and Trump approval”. If approved, that might largely solve the problem I’m warning about here. We’ll see…]

China has been prioritizing the mining and refining of rare earth elements (REEs) since about 1992, and the production of neodymium-iron-boron magnets that are used in cars and wind turbines. See Robert Bryce’s post “Anti-Magnetic” 6/5/25 for a great article on this, including some history on China’s rare earth element development. (REE, aka rare earth minerals).

Last month, trade talks in Geneva reportedly reached a ‘deal’ whereby China would loosen or speed up granting of export licenses for critical minerals. But apparently the opposite has been happening – if anything, getting export licenses has become even slower.

The other day, President Trump called President Xi, and negotiating teams are meeting, but it doesn’t sound like any significant progress has been made.

The seriousness of this situation has global repercussions. China’s control of REEs and motor magnets puts them in a very powerful position. They are restricting exports of REEs, causing damaging supply problems for autos, wind turbines, and most importantly, our military.

Never forget that God is in control of national events:

“Today I am appointing you to speak to nations and kingdoms. I give you authority to pull them up by the roots and tear them down. I give you authority to destroy them and crush them. I give you authority to build them up and plant them.” Jeremiah 1:10

“He makes nations great, and then he destroys them.
He makes nations grow, and then he scatters them.” Job 12:23

The importance of rare earth minerals

From https://www.defenseone.com/threats/2025/04/chinas-rare-earth-mineral-squeeze-will-hit-pentagon-hard/404776/

“In early April, Beijing imposed sweeping export controls on seven rare earth elements used in everything from laser-guided weapons to MRI machines. The newly restricted elements—samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium—require a government-issued license for export, with Chinese officials citing “national security” justifications for the change.

Dan Darling of Forecast International observed earlier this month that “while the latest step taken by China is not an outright ban, this licensing requirement will undoubtedly introduce uncertainty and limit the consistent flow of critical components to manufacturers…highlighting the potential for the weaponization of crucial supply chain resources.

China has long dominated rare-earth mining and processing. But this latest decision tightens the faucet on materials needed for technologies ranging from hypersonic-missile guidance systems to cancer treatments. The measures follow similar export bans issued in December 2024 on gallium, germanium, and antimony—metals used in semiconductors, infrared optics, and armor-piercing munitions.” emphasis mine - I’m concerned about our military preparedness

Evelyn Cheng wrote a great article for CNBC 5/28/25.

She wrote “What’s concerning for international business is that there are barely any alternatives to China for obtaining the rare earths. Mines can take years to get operating approval, while processing plants also take time and expertise to establish.

“Today, China controls over 90% of the global refined supply for the four magnet rare earth elements (Nd, Pr, Dy, Tb), which are used to make permanent magnets for EV motors,” the International Energy Agency said in a statement. That refers to neodymium, praseodymium, dysprosium and terbium.

“Analysts from AlixPartners estimate that a typical single-motor battery electric vehicle includes around 550 grams (1.21 pounds) of components containing rare earths, unlike gasoline-powered cars, which only use 140 grams of rare earths, or about 5 ounces.”

very special magnets

from magnetsource.com:

“Neodymium (neo) magnets, which are part of the rare earth magnet family, are popular for their extreme strength in a compact size and weight…Neo Magnets are the strongest magnets in the world – the higher the grade, the stronger the pull force of the magnet.”

Incredibly, China has cornered the market on production of these magnets – controlling about 90% of global production! It will take billions of dollars and many years for the US to catch up. China has a chokehold on exports and uses their control of supply as a tactical weapon.”

Cars are affected too

Depending on what kind of motors are used, and how many bells and whistles, battery electric vehicles (BEVs) use at least ‘4X as many REEs as regular gas cars’

“… and an EV can have up to six times more minerals than a combustion vehicle, making them on average 340 kg (750 lbs) heavier…the average 60 kilowatt-hour (kWh) battery pack…alone contains roughly 185 kilograms of minerals, or about 10 times as much as in a typical car battery (18 kg)…Lithium, nickel, cobalt, manganese, and graphite are all crucial to battery performance, longevity, and energy density. Furthermore, EVs can contain more than a mile of copper wiring inside the stator to convert electric energy into mechanical energy…Out of the eight minerals in our list, five are not used in conventional cars: graphite, nickel, cobalt, lithium, and rare earths.” source: EVs v s. Gas Vehicles, here’s a graphic:

From Mish Talk:

“Four major automakers are racing to find workarounds to China’s stranglehold on rare-earth magnets, which they fear could force them to shut down some car production within weeks”

“China produces 60 percent of the world’s rare earths but processes nearly 90 percent, which means that it is importing rare earths from other countries and processing them. This has given China a near monopoly.”

It’s hard to imagine that car makers would be this desperate, but here’s what the WSJ wrote:

“Several traditional and electric-vehicle makers—and their suppliers—are considering shifting some auto-parts manufacturing to China to avoid looming factory shutdowns, people familiar with the situation said…In the auto industry, rare-earths are what allow electric-vehicle motors to function at high speed…In the U.S., Ford Motor shut down production of the Ford Explorer at its Chicago plant for a week in May because of a rare-earth shortage, a spokesman said…Antimony (Sb), a critical metalloid, is a key element of the American war machine, essential for communication equipment, night vision goggles, explosives, ammunition, nuclear weapons, submarines, warships, optics, laser sighting and more, according to U.S. Army Major General (retired) James Marks.” emphasis mine

From Reuters article: -2025-06-04/ “BERLIN/FRANKFURT, June 4 (Reuters)

“Some European auto parts plants have suspended output and Mercedes-Benz is considering ways to protect against shortages of rare earths, as concerns about the damage from China's restrictions on critical mineral exports deepen across the globe.

China's decision in April to suspend exports of a wide range of rare earths and related magnets has upended the supply chains central to automakers, aerospace manufacturers, semiconductor companies and military contractors around the world.” emphasis mine

Wind turbines, too

In an article in May ’25, where I was concerned about the extensive environmental damage and slave labor resulting from the mining of REEs, I explained why wind turbines increase the demand, and included a couple excerpts and sources:

from AmazingMagnets.com

“Wind turbines and generators require very strong permanent magnets. Rare earth magnets, like neodymium magnets, are used in some of the largest wind turbines in the world. These magnets, made of neodymium, iron and boron, are the strongest type of commercially available permanent magnet. Neodymium magnets provide efficient electricity generation. They're used in wind-turbine designs to reduce costs, improve reliability, and lower the need for expensive maintenance.”

From blog.ucs.org 12/12/2022

“The most common type of magnets used in wind applications are neodymium–iron–boron magnets (NdFeB). These magnets typically contain four rare earth elements: neodymium and praseodymium strengthen the magnet, while dysprosium and terbium make it resistant to demagnetization at high temperatures… Global demand for neodymium for wind turbines is estimated to increase 48% by 2050. Rare earth elements are critical to the renewable energy future and are the main “critical metals” used in wind turbines.”

It's not just the magnets. In a July ’24 post, again being concerned about the environmental impact of mining REEs, I wrote

“massive amounts of toxic waste, including radioactive waste, from mining rare earth elements (REE)

According to Harvard.edu,

“For every ton of rare earth produced, the mining process yields … one ton of radioactive residue. Emphasis mine This stems from the fact that rare earth element ores have metals that, when mixed with leaching pond chemicals, contaminate air, water, and soil. Most worrying is that rare earth ores are often laced with radioactive thorium and uranium,… Overall, for every ton of rare earth, 2,000 tons of toxic waste are produced.”

The conversation.com writes:

“Rare earth minerals are vital for many green technologies; they’re in magnets for wind power turbines and in batteries for hybrid-electric vehicles. In fact, up to 600 kilograms (~1320 lbs) of rare-earth metals are required to operate just one wind turbine.” emphasis mine

Interludeone.com has an excellent article by Jonathan Jayes 4/23/25 on REE /China,

…“political noise” wasn’t just noise – it was rapidly escalating into direct actions targeting the very materials essential for green technology. Building wind turbines isn’t just about steel and fiberglass; it’s about a sprawling supply chain with precarious dependencies, especially on rare earth metals.” emphasis mine

Jonathan continues:

“A key component here, especially for many efficient modern designs like direct-drive turbines (which ditch the heavy gearbox), is the Permanent Magnet Synchronous Generator (PMSG)¹⁹. These generators rely on incredibly powerful permanent magnets, specifically Neodymium-Iron-Boron (NdFeB) magnets, to convert rotational energy into electricity²⁰.

These aren’t your average fridge magnets. They require specific Rare Earth Elements (REEs) – primarily Neodymium (Nd) and Praseodymium (Pr), often boosted with smaller amounts of Dysprosium (Dy) and Terbium (Tb) for high-temperature performance²⁰.

And here’s the crux: while REEs are mined in various places (including the US and Australia), the complex, dirty, and technologically challenging task of separating and processing these elements into usable oxides and metals is overwhelmingly dominated by one country: China. China controls over 85% of global REE processing capacity²⁰. Crucially, this dominance is even starker for the heavy REEs like Dysprosium and Terbium – essential for high-performance magnets – where China accounted for effectively 100% of global processing until very recently.

But it doesn’t stop there. China also dominates the next crucial step – manufacturing the finished high-performance NdFeB magnets themselves, accounting for around 90-92% of global production²⁰. This dual chokehold isn’t just a passive risk; it’s now being actively leveraged.”

A few slim hopes for increasing supply

Mining and recycling of REEs will help, and the Trump administration is encouraging mining and lowering the overzealous regulatory barriers, but the material itself is not enough – the next step, refining, is technical and difficult, and the final manufacturing of the powerful magnets will take years to really get going in the U.S.

I wrote “We Still Need Coal” in December 2023. Thanks to Thomas Shepstone’s Energy Security and Freedom 3/18/25, I learned something else about coal - surprisingly, coal ash is full of rare earth elements!

I asked Frontieras about this. They answered that it was doubtful that getting rare earth minerals from coal ash would be profitable.

(That may change now that China has cut us off from REEs)

investing accordingly

Rare earth mineral supply needs to be built up in the US. Many companies will try to meet the need for mining, refining, and magnets, but it will take lots of capital and it won’t happen overnight. So it’s like a new industry – it’s too soon to tell which companies will be successful. For this reason, the safest way to invest in REEs is through an ETF that spreads the risk – like Van Eck Rare Earth/Strategic Metals (REMX).

EVs are going to end up being a niche market for the elite diehards and the duped climate change crowd. There are just too many negatives for them to become very popular, and this recent REE supply problem will damage sales even further. For this reason, investing in any EV company, or wind turbine or backup battery company is apt to be a losing proposition. On the other hand, the ‘hated’ oil and refinery business is making a comeback as the EV dreams fade.

Conclusion

All production of EVs, wind farms, and container-sized backup batteries should be stopped, for national security. We don’t need renewables – we have much better, much more economical, and much more reliable sources of energy – and our national defense is much more important than what kind of cars we drive. Our military needs those REEs!