The Rare Earth Enclosure

Signal
In August 2025, China intensified efforts to dominate global rare earth supply chains, finalising new agreements with key producers in Africa and Southeast Asia. These deals expand China's control over critical elements used in missiles, sensors, EVs, and semiconductors. Despite U.S. legislation and investment, American processing and mining capacity remains limited. Current U.S. rare earth imports are still over 70% dependent on China. The strategic window for supply diversification is rapidly narrowing.

Why it matters

Rare earths are not optional. Without secure access, advanced manufacturing, defence readiness, and technological autonomy degrade. China's consolidation of global reserves and refining capacity tightens its leverage across critical industries. The U.S. and allies face a lagging timeline to build alternative supply networks and processing infrastructure. This is no longer about market competition but strategic endurance. Delay equals dependence.

Strategic takeaway
Control of rare earths is control of the future industrial base. Accelerate redundancy and localisation.

Investor Implications
Investors should track non-Chinese rare earth producers such as Lynas Rare Earths (ASX: LYC), MP Materials (NYSE: MP), and Iluka Resources (ASX: ILU). Defence primes like Raytheon (NYSE: RTX) and Lockheed Martin (NYSE: LMT) are directly exposed to rare earth supply shocks in missile and sensor systems. Recycling technologies from firms like Neo Performance Materials (TSE: NEO) could scale faster than new mining projects. Capital inflows will prioritise upstream control, processing capacity, and alternative magnet technologies that reduce dependence on Chinese refining.

Watchpoints

Source: images.mktw.net

The signal is the high ground. Hold it.
Subscribe for monthly tactical briefings on AI, defence, DePIN, and geostrategy.
thesixthfield.com