Rare Earths: The New Battleground of Global Power
by Cristina Di Silvio
At the beginning of 2026, rare earths, strategic elements such as praseodymium, neodymium, and dysprosium, have emerged as the new epicenter of global competition. They are no longer mere raw materials; they are decisive tools for electric motors, advanced radar systems, guided missiles, and defense technologies. Whoever controls them wields direct power over technology and global military security. China, long the undisputed leader in production and refining, has consolidated its dominance by creating a national pricing index for rare earths through the Baotou exchange, backed by the state and official media. This benchmark introduces transparency within the domestic market, but above all, it confirms Beijing as the arbiter of global supply chains: every price fluctuation or export restriction can become a strategic lever, influencing the operational capacity of Western industries and governments. The allies’ response was swift. On January 12, 2026, in Washington, G7 finance ministers, together with representatives from Australia, South Korea, India, and other strategic partners, met to discuss coordinated solutions to reduce dependency on Beijing. Among the proposals was a global price floor: a minimum price level agreed upon by allied states to stabilize the market and protect Western producers from potential strategic dumping. This represents a paradigm shift. Industrial and technological security has become a multilateral issue: controlling rare earths today means influencing military capabilities, technological autonomy, and the strategic power of states. Industrial dynamics confirm the picture. The British company Pensana relocated its refining project from Saltend, in Yorkshire, to the United States, attracted by the fiscal incentives and market guarantees of the Inflation Reduction Act. In the U.S., tax credits, protection against price risks, and support for the supply chain make investments sustainable and strategically relevant. In the United Kingdom, where public support remains limited and lacks price guarantees, projects remain vulnerable, highlighting how industrial policy is now an integral part of national security. In Europe, although the Critical Raw Materials Act and the REsourceEU Action Plan aim to build strategic autonomy, without direct price protections or long-term contracts, investment profitability remains uncertain, and European industrial chains remain exposed to external shocks. The stakes are clear: rare earths are strategic assets for global technological and military security. Controlling their production and refining means holding decisive levers over defense systems, radar networks, satellites, and precision engines. The battle over these materials is silent, yet tangible: price fluctuations or export restrictions can translate immediately into geopolitical pressure. Today, the United States offers the most favorable framework, thanks to targeted incentives, subsidies, and protection against price manipulation, while Europe advances cautiously, and the United Kingdom remains particularly vulnerable without structural interventions. Global competition for rare earths is no longer merely economic: it intertwines technology, politics, and military strategy. Establishing transparent benchmarks, building independent supply chains, and providing public support for investments have become instruments of technological and military sovereignty. Whoever controls these resources controls the foundations of twenty-first-century global power. The challenge is not just who possesses the technology or capital, but who can defend industrial and strategic autonomy in a world where reliance on a single supplier can become a military and economic vulnerability.
