France Says Western Countries Could Diversify Rare Earth Supplies Away From China Within Five Years

Western countries could achieve a meaningful level of diversification away from China for rare earths and specialised permanent magnets within three to five years, according to France's senior envoy for strategic minerals, as governments and manufacturers seek to reduce their exposure to supply-chain disruptions.

Benjamin Gallezot, France's interministerial delegate for strategic minerals and metals supplies, outlined the outlook in comments reported by Reuters on October 28. His assessment suggests that Western governments believe alternative sources could become commercially significant sooner than some industry observers expect, although major technical and industrial obstacles remain.

China occupies a dominant position in several parts of the rare earth supply chain, including the processing of materials and the manufacture of specialised permanent magnets. According to Reuters, China accounts for as much as 90% of production of some specialised rare earth magnets. These materials are used in electric vehicles, industrial machinery, electronics, renewable energy equipment and defence systems.

The concentration of production has become a strategic concern for governments and companies seeking to secure supplies of critical minerals. Export restrictions on permanent magnets introduced by Beijing last year disrupted industries including automotive manufacturing and exposed the risks associated with dependence on a single major supplier, Reuters reported.

Gallezot said that alternative supply chains could be developed without requiring hundreds of new mines worldwide. He argued that the market was limited in scale and that several existing projects could collectively provide meaningful diversification if governments and companies accelerated their development.

Projects involving Belgian chemicals company Solvay and French rare earths company Carester are among the initiatives cited in the report. Other efforts are progressing in Australia, the United States, Japan, Brazil and India.

However, developing alternative supply chains involves more than extracting rare earth-bearing ores. Producers must also establish processing facilities, meet technical specifications, manage environmental requirements and build reliable manufacturing capacity. In particular, magnet production could remain a bottleneck even if mining and refining projects expand, Gallezot said.

Rare earths are a group of 17 metallic elements with specialised magnetic, optical and chemical properties. Although they are used in relatively small quantities in many finished products, particular elements and magnet grades can be difficult to substitute without redesigning equipment or compromising performance.

The supply-chain challenge is therefore both economic and technological. New projects need long-term investment and dependable customers, while manufacturers need assurance that alternative suppliers can deliver consistent quality at competitive prices. Building those relationships may take years even after mines and processing plants become operational.

The Group of Seven advanced economies agreed in June to strengthen coordination on critical minerals. Their stated goals include reducing reliance on any single supplier outside the G7 and partner countries to below 60% for rare earths and permanent magnets by 2030, with a longer-term target of 50%, according to Reuters.

For China, the diversification push could create new competition in a sector that has become an important source of industrial leverage. Yet the emergence of alternative suppliers would not necessarily mean that Chinese producers lose their central role. Demand for rare earths is expected to remain linked to manufacturing, electrification, digital infrastructure and defence technologies, while China's existing industrial ecosystem gives it substantial advantages.

The speed of diversification will depend on whether projects can move from announcements to commercial production, and whether buyers are prepared to pay for supply-chain resilience. Higher-cost alternatives may be attractive to companies seeking to reduce geopolitical risk, but price, quality and production scale will continue to influence purchasing decisions.

Gallezot's three-to-five-year estimate offers a relatively ambitious timeline. Whether it is achieved will depend on investment, technical execution and coordination among governments and manufacturers. For global industry, the issue is increasingly not simply where rare earths are mined, but whether the entire chain—from processing to finished magnets—can operate reliably outside China.