Rare Earth Supply Chain: From Ore to End Market
The rare earth supply chain runs from mine to magnet in five stages, and China leads every one of them. China mined about 69% of the world's rare earths in 2025, according to USGS, but its share is even higher further down the chain: the IEA estimates China accounts for around 90% of both rare earth refining and magnet production.
| Stage | What happens | China's share |
|---|---|---|
| 1. Mining and concentration | Ore is mined and upgraded into a concentrate | About 69% of mine output (USGS, 2025) |
| 2. Separation and refining | Concentrate is dissolved and split into individual oxides | Around 90% of refining (IEA) |
| 3. Metals and alloys | Oxides are reduced to metals and alloyed with iron and boron | Most of world output |
| 4. Magnets | Alloy is turned into sintered or bonded NdFeB magnets | Around 90% of magnet production (IEA) |
| 5. End uses | Magnets go into EV motors, wind turbines, electronics and defense systems | Global manufacturing |
Sources: USGS Mineral Commodity Summaries 2026; IEA Global Critical Minerals Outlook.
Why the Middle of the Chain Matters Most
Rare earth deposits exist in many countries, so mining alone does not create supply security. The difficult steps are separating the mixed concentrate into individual elements and turning those oxides into metals and magnets. These steps need specialist chemistry and engineering, generate hazardous waste, and take years to permit and build. China has also banned the export of separation and magnet-making technology since 2023.
What It Means for Investors
- Integration adds value. Companies that separate, make metals or produce magnets outside China are scarcer than miners and attract more government support.
- Mining-only projects depend on others. A mine without access to separation outside China may still rely on Chinese processors.
- Execution is the main risk. New processing plants often take longer and cost more than planned.
Rare Earth Supply Chain FAQ
What are the stages of the rare earth supply chain?
The rare earth supply chain has five main stages: mining and concentration, separation and refining into individual oxides, conversion to metals and alloys, magnet manufacturing, and use in products such as electric vehicle motors and wind turbines.
Where is the bottleneck in the rare earth supply chain?
The bottleneck in the rare earth supply chain is separation and refining, followed by metal and magnet making. Mines can be found in many countries, but China accounts for around 90% of rare earth refining and magnet production, according to the IEA.
Why is it hard to build a rare earth supply chain outside China?
Building a rare earth supply chain outside China is hard because separation requires complex chemistry, specialist staff, long permitting and careful waste handling, and because China has banned the export of separation and magnet-making technology since 2023.