There are 17 rare earth elements. Fifteen belong to the lanthanide series, the row that sits below the main periodic table, running from lanthanum (atomic number 57) to lutetium (71). Add scandium and yttrium, two elements with similar chemical behaviour that occur in the same mineral deposits, and you have the complete group.
The name is misleading. Most rare earths are not geologically scarce. The problem is concentration and processing. They occur in very low quantities dispersed through ordinary rock, and separating one from another requires acid leaching, solvent extraction, and specialised chemistry that almost no country has built at meaningful scale outside China.
China refines approximately 85 to 90 per cent of the world’s rare earths. For sintered permanent magnets, the product most relevant to motors and electronics, China’s share is closer to 94 per cent. Alternative mining operations in Australia, Canada, and the United States do exist, but without domestic processing capacity, the ore still returns to China for refining. The constraint is the chemistry, not the geology. That asymmetry is what gives China’s export licensing system its practical reach.
Where they appear in everyday hardware
Neodymium and praseodymium form the core of NdFeB (neodymium-iron-boron) magnets, the strongest permanent magnets commercially available. These sit inside electric vehicle traction motors, hard disk drive voice-coil actuators, the miniature drivers in quality headphones, and the vibration and autofocus actuators in smartphones. Dysprosium and terbium are added in small percentages to keep those magnets stable at operating temperature. Without them, an EV motor’s magnets would lose strength under normal heat.
Lanthanum goes into glass. Modern camera lenses, including the modules inside phone cameras, use lanthanum-doped glass because it bends light more efficiently. A telephoto lens can contain lanthanum at up to 50 per cent of its glass composition by weight.
Europium is a phosphor. It produces the red and blue light in colour displays and remains the basis of white LED phosphors in general lighting. The shift from CRT to LCD and then to LED did not eliminate europium from lighting; it changed which form it takes.
Erbium amplifies light inside fibre optic cables. Erbium-doped fibre amplifiers, known as EDFAs, regenerate optical signals across hundreds of kilometres of cable. Every broadband connection, cloud service, and video call passes through multiple EDFAs. There is no commercially viable alternative for long-haul fibre at this scale.
China’s two waves of controls
In April 2025, China introduced export licensing requirements for seven rare earth elements: samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium. These are the elements most directly tied to permanent magnets, phosphors used in military radar, and defence-adjacent materials. Any company exporting these elements or products made from them was required to apply for a licence from China’s Ministry of Commerce.
Applications must be processed within 45 working days under the regulations. In practice, after the April controls took effect, backlogs pushed real approval times beyond that. European buyers faced rare earth prices at up to six times the Chinese domestic price in the months that followed.
In October 2025, China announced a second wave covering five additional elements: holmium, erbium, thulium, europium, and ytterbium. These map onto fibre optic amplifiers, display phosphors, and industrial laser systems. Following diplomatic negotiations in May 2026, the October announcement was suspended for one year. The suspension ends on 10 November 2026.
The controls also include an extraterritorial provision. Any product manufactured outside China that contains 0.1 per cent or more of Chinese-origin rare earths requires a Chinese export licence before it can be sold to a third country. This extends Beijing’s regulatory reach into supply chains in South Korea, Japan, Germany, and anywhere else that uses Chinese-processed material as an input, regardless of where final assembly occurs.
What resumes on 10 November 2026
The five Wave 2 elements correspond to specific product categories.
Europium is in LED lighting and colour displays. Licensing requirements add cost and lead time to a phosphor that existing manufacturing lines cannot quickly substitute.
Erbium is not in consumer products directly. It is in the fibre infrastructure that delivers broadband and cloud services. Licensing erbium exports is, in practical terms, licensing the expansion of global fibre capacity.
Holmium, thulium, and ytterbium are used in industrial and medical lasers and in fibre amplifiers. Their licensing adds friction to professional equipment and networking gear sold by manufacturers outside China.
NdFeB magnets, which depend on the Wave 1 elements, have already repriced. Neodymium prices rose approximately 89 per cent year-over-year through 2025 into 2026. Wave 2 adds a second inflection point to an already-moving market. Buyers who have been watching since April 2025 are inside the disruption, not ahead of it. The question is whether they act before the next step.
What to do before 10 November
Buy electronics with quality magnet assemblies before the next repricing cycle. Headphones with full-size neodymium drivers, hard drives for local storage, brushless power tools with permanent-magnet motors: these categories carry direct exposure to continued magnet price pressure. Today’s prices reflect current market conditions. The November resumption of controls will reset the conditions that set those prices.
When comparing products, note motor type. Brushless motors outperform brushed motors in efficiency and longevity, and they carry greater exposure to rare earth cost pressure. The brushless option is a better long-term asset even at a higher entry price, because it depreciates more slowly and performs better throughout its life.
Consider repairability. Products with user-replaceable batteries and serviceable motors hold their value better as rare earth costs push replacement-part prices higher. Price pressure hits repair and replacement first. Original retail prices typically lag 12 to 18 months. For the full case for repairability as a form of asset protection, see Why the Right to Repair Argument Is Not About the Environment.
The structural argument here is the same as the one that runs through this site’s coverage of copper and energy infrastructure: finite physical inputs, rising demand, no digital substitute, and a processing bottleneck that cannot be resolved in the time available. For the macro frame, the Alden, Doomberg, and Gromen reading on real assets is the best starting point. For the parallel argument in base metals, see Copper: the Quiet Protagonist of the AI Boom.
The 10 November deadline is already set. The elements in scope are already named. The only remaining variable is price.
This article contains no affiliate links. It is a reference piece.
Sources: [1] Pillsbury Law, China suspends export controls on critical minerals (November 2025). [2] IEA Commentary, “With new export controls on critical minerals, supply concentration risks become reality” (2025). [3] China Briefing, “China’s Rare Earth Export Controls: Impact on Businesses and Industries.” [4] CSIS, “The Consequences of China’s New Rare Earths Export Restrictions” (April 2025). [5] German Marshall Fund, “Rare Earth Statecraft Phase Two.” [6] RP Photonics, “Rare-Earth-Doped Fibers.”