IEA Chief Warns of China's Dominance in Strategic Minerals, Calls for Global Cooperation

The International Energy Agency's head, Fatih Birol, expresses concern over China's dominance in strategic minerals, calling for global cooperation to diversify supply chains.

The International Energy Agency (IEA) head, Fatih Birol, has expressed concern over China's dominance in strategic minerals, advocating for global cooperation to diversify supply chains. This call comes amidst significant geopolitical tensions and market disruptions, particularly in the rare earth sector.

Birol's comments follow a series of events that have underscored the vulnerabilities of relying on a single supplier for critical materials. For instance, MP Materials, a U.S. rare earth miner, halted exports to China in 2025, leading to a surge in prices and prompting a global push to diversify supply chains [2]. This move aligns with broader U.S. industrial policies aimed at securing domestic processing and reducing reliance on Chinese supply chains.

The U.S. government has responded with substantial investments, including a $400 million investment in MP Materials and a $110 per kg price guarantee for NdPr production. These measures aim to bolster domestic processing capabilities and support the development of end-to-end supply chains. Other countries, such as Australia, Saudi Arabia, and Greenland, are also emerging as key non-China suppliers, with projects securing significant rare earth reserves and processing facilities [2].

The shift in supply chains is creating opportunities for downstream magnet manufacturers with access to secure, non-China feedstock. Companies like Vulcan Elements and Ucore are leveraging U.S.-sourced feedstock to produce magnets for defense systems, EVs, and renewable energy markets. These developments signal a structural reordering of the rare earth landscape, driven by geopolitical risk mitigation, national security imperatives, and green technology demand.

Despite challenges such as high capital costs and regulatory delays, the long-term outlook is promising. The U.S. government's sustained commitment, evident in the $439 million DPA investment in rare earth processing and $9 billion in international partnerships, indicates a strategic pivot towards reshaping the supply chain [2].

In conclusion, the rare earth industry is entering a post-China era, where diversification and resilience are paramount. For investors, identifying companies that control secure feedstock and have end-to-end processing capabilities is crucial. As the global demand for rare earths surges, driven by EVs, AI, and defense modernization, those who act now will be well-positioned to capitalize on the next industrial revolution.

References:
[1] https://asia.nikkei.com/spotlight/supply-chain/iea-chief-expresses-concern-over-china-s-dominance-in-strategic-minerals
[2] https://www.ainvest.com/news/rare-earth-supply-chain-transformation-investing-post-china-era-2508/