NEW YORK CITY, New York: Goldman Sachs has warned that global supply chains for rare earths and other critical minerals face mounting disruption risks, as China tightens export controls and maintains its near-total dominance across mining, refining, and magnet production.

In a research note published this week, the bank said Beijing's latest export curbs, announced on October 9, added five new rare earth elements and expanded scrutiny on semiconductor users ahead of a planned meeting between U.S. President Donald Trump and Chinese leader Xi Jinping.

Goldman Sachs said China controls 69 percent of global rare earth mining, 92 percent of refining, and 98 percent of magnet manufacturing, underscoring its leverage in global technology and defense supply chains.

Rare earth elements (REEs), used in batteries, semiconductors, artificial intelligence, and military systems, have become a geopolitical flashpoint as governments scramble to reduce dependence on China.

While the total rare earth market was worth only US$6 billion in 2024, Goldman warned that even a 10 percent disruption in industries reliant on REEs could cause $150 billion in lost global output and stoke inflationary pressures as shortages ripple through the economy.

The bank identified samarium, graphite, lutetium, and terbium as particularly vulnerable to supply shocks.

Samarium, vital for heat-resistant magnets used in aerospace and defense, could face severe shortages if China restricts exports. Disruptions in lutetium and terbium, both critical for electronics and optical devices, would also pose significant economic risks.

Goldman said "light" rare earths such as cerium and lanthanum may be targeted next, given China's dominance in both mining and refining.

While Western producers such as Lynas Rare Earths and Solvay could partially ease shortages, the bank said reliance on China remains substantial.

Governments are racing to build alternative supply chains, but Goldman cited steep barriers — from geological scarcity to environmental and technical hurdles.

Heavy rare earths are especially scarce outside China and Myanmar, with most deposits small, low-grade, or radioactive. The bank noted that developing new mines typically takes 8–10 years, while building refining capacity requires another five years.

Even as magnet production expands in the U.S., Japan, and Germany, output remains constrained by China's grip on inputs like samarium.

Goldman Sachs advised investors to hedge exposure through equities in the sector, highlighting Iluka Resources, Lynas Rare Earths, and MP Materials as potential beneficiaries.

The bank projected a looming deficit in neodymium-praseodymium oxide— key to high-performance magnets — as demand outpaces supply.

Beyond rare earths, Goldman warned that geopolitical tensions are amplifying disruption risks across commodities such as cobalt, oil, and natural gas, as supply networks become increasingly weaponized.