Asia Dominates In Global Rare Earths Market, Malaysia Marks Milestone

Asia is set to maintain its dominance in the global rare earths market through the next decade, led by Mainland China’s entrenched control over supply, processing and exports, according to BMI, a Fitch Solutions company.

In its latest outlook, BMI said Asia-Pacific accounted for 85% of global rare earth mine production in 2023, with total output reaching 321,100 tonnes of rare earth oxides (REO), and is projected to rise to 413,600 tonnes by 2034. China alone contributed 68% of global supply and controls nearly half of the world’s reserves.

“Beijing’s state-led consolidation, production quotas and export controls will continue to reinforce its grip on the rare earths sector,” BMI said, adding that China’s technological advantage and cost competitiveness make it unlikely for rivals to dislodge its position in the short to medium term.

China Tightens Control Despite Trade Frictions

China’s rare earth production remains centred around two main hubs — the Bayan Obo mine in Inner Mongolia, which supplies most light rare earth elements (LREEs), and the southern provinces rich in heavy rare earth elements (HREEs). Over the years, the country has streamlined its industry into a tightly regulated duopoly, dominated by China Northern Rare Earth Group and China Rare Earth Group.

New export controls introduced in 2025 have further expanded China’s regulatory reach, now covering rare earth-related technologies and even products manufactured overseas using Chinese inputs. The move underscores Beijing’s strategic leverage amid recurring US-China trade tensions.

Myanmar’s Fragile Supply and Australia’s Rising Role

Myanmar remains the world’s second-largest producer, supplying 11% of global output and nearly half of mined HREEs, such as dysprosium and terbium. However, BMI noted that political instability and underregulated mining continue to threaten the country’s supply reliability.

China sources about 58% of its rare earth imports from Myanmar, exposing global supply chains to disruption risks. While exports to China have resumed after temporary halts, supply remains vulnerable to local unrest and environmental concerns.

Meanwhile, Australia is rapidly emerging as a critical alternative supplier, anchored by Lynas Rare Earths’ Mount Weld mine and the newly opened Kalgoorlie processing plant. BMI expects strong growth driven by a robust project pipeline, including Hastings Technology Metals’ Yangibana project and Iluka Resources’ Eneabba refinery, which are set to significantly expand Australia’s upstream and midstream capabilities.

Malaysia Marks Milestone With Heavy Rare Earth Production

Malaysia has achieved a significant milestone in the global supply chain with the first production of separated heavy rare earth oxides outside China. Lynas’ Kuantan facility began producing dysprosium oxide in May 2025 and terbium oxide in June, marking an important diversification step away from China’s monopoly.

While Malaysia’s domestic upstream sector is still developing, the government is pushing to leverage its ionic clay resources, particularly in Kelantan, Terengganu and Perak, which collectively host most of the nation’s rare earth deposits. In May 2025, Lynas signed a Memorandum of Understanding with Menteri Besar Incorporated (Kelantan) to source feedstock locally from these deposits.

India and Vietnam Still Emerging

BMI said both India and Vietnam, which hold 8% and 4% of global reserves respectively, remain underdeveloped but hold long-term potential. India’s National Critical Mineral Mission aims to explore 1,200 projects through 2031, while Vietnam targets up to 80,000 tonnes of annual REO output by 2050.

Despite diversification efforts across Asia and beyond, BMI concluded that “China’s entrenched production capacity, advanced refining technology, and cost advantages ensure its dominance will remain unchallenged for years to come.”

Source: Business Today