New Delhi, Oct 15 — As countries, including India, come together to tap rare earth sources and cut their dependence on China, they are becoming somewhat wary of Beijing’s weaponisation of critical minerals, according to a new report.
China controls 90 per cent of global processing and refining capacity of rare earths, which gives it ample leverage over the US and its allies.
Last year, Beijing demonstrated this when it rolled out rare earth export controls in response to US President Donald Trump’s tariffs, according to the report in World Politics Review.
“The United States and Europe have been caught flat-footed in recent years by China’s actual and threatened use of export controls over critical minerals and related magnets,” the report warned.
Moreover, the “forcefulness and success of China’s moves on rare earths” have led some Western officials to “accuse Beijing of a decades-long scheme to place a boot on the neck of the global economy”.
Meanwhile, China has become geopolitically more ambitious, with its objective no longer merely to dominate rare earth production at home but also control the global industry by deciding which countries receive the technology, technicians and market access required to compete.
Jack Lifton, Co-Chair, Critical Minerals Institute (CMI), wrote in an article in Investor News recently that China’s strategy for Malaysia and Indonesia are clear indicators of this new policy.
Malaysia has prohibited exports of its unprocessed rare earth material, stressing domestic value addition while inviting both Chinese and non-Chinese investment. Since then, Malaysia’s non-Chinese industrial base has become more formidable.
China does not want Malaysia simply to become a Western or Japanese-sponsored competitor. It wants Malaysia to become a multi-aligned processing center in which China remains an indispensable participant, said the article.
The article also highlighted that Indonesia wants to develop rare earth resources, but there is much less public evidence that China has yet to establish a major, dedicated rare earth separation or magnet project there. Indonesia announced in February 2026 that it had identified eight prospective blocks containing rare earths and other strategic minerals.