With new export controls on critical minerals, supply concentration risks become reality – Analysis - IEA

The Global Critical Minerals Outlook 2025 showed that, for a remarkable 19 out of 20 important strategic minerals, China is the leading refiner, with an average market share of 70%. Moreover, our analysis shows that this concentration has only intensified in recent years. Reliance on a small number of suppliers increases vulnerability to shocks and disruptions, be it from extreme weather, technical failure or trade disruptions.

This is no longer just a theoretical concern. There has been a proliferation of export controls on key materials and technologies in recent years. New restrictions on rare earth elements and lithium-ion battery supply chains underscore once again the vulnerabilities and risks.

For rare earths used in magnets for various industries – notably neodymium, praseodymium, dysprosium and terbium – China accounted for around 60% of global mining output in 2024, followed by Myanmar, Australia and the United States. China’s dominance is even greater in the separation and refining stages, representing about 91% of global production, with Malaysia a distant second.

Moreover, China has significantly strengthened its position in the manufacturing of rare earth-containing permanent magnets – magnets that retain their magnetic properties indefinitely without the need for external power. Two decades ago, China accounted for around 50% of the production of sintered permanent magnets commonly used in cars, wind turbines, industrial motors, data centres and defence systems. This share has risen significantly to 94% today, making China the world’s single largest supplier of the component critical to the manufacturing of the most powerful motors that are used for many cutting-edge applications. Such high market concentration leaves global supply chains in strategic sectors – such as energy, automotive, defence and AI data centres – vulnerable to potential disruptions.

In 2024, China exported 58 000 tonnes of rare earth magnets – enough to manufacture components to make millions of cars, industrial motors or aircraft – or to build thousands of strategic military systems, data centres or wind turbines.

is not only rare earth elements that are impacted. On 9 October 2025, China also announced major export controls on lithium-ion battery supply chains, effective from 8 November. The new controls expand on previous measures and cover a much broader range of battery materials, technologies and equipment across multiple stages of the supply chain. They now include battery cells and packs for high-performance applications, cathode precursors, an expanded scope of anode materials, a broader coverage of lithium iron phosphate (LFP) cathode materials, and battery and material production equipment and technologies.

China currently dominates the midstream and downstream supply chains for batteries globally, with shares of 80% or more in many key areas. In some segments such as precursor cathode materials and LFP cathode materials, China maintains a near monopoly, with shares of 95% or above. This exceptional concentration creates multiple points of vulnerability across the supply chain.2

Looking further ahead, the new controls target some critical chokepoints in global battery supply chains, notably graphite anode material and cathode material precursors for which supply options outside China are extremely limited. If these supplies are disrupted, this could severely restrict the ability of the rest of the world to produce batteries, with potentially significant strategic and economic consequences.

LFP batteries are a case in point, with markets expanding rapidly. They represent half of the global electric car battery market and the majority of the energy storage market. While China currently dominates this segment, efforts are underway to develop LFP battery production outside China. However, new restrictions on LFP cathode materials could impede these initiatives, reinforcing China’s dominance in this technology, with major implications for energy storage deployment.