China’s dominance in the global supply of rare earth minerals, crucial for modern technology, may take the West up to ten years to challenge, according to a warning from Goldman Sachs. The country accounts for over 90% of global rare-earth refining and 98% of all magnet production, with the majority of the world’s rare-earth ore being mined in China. The minerals are at the center of a trade dispute between Washington, the EU, and Beijing.

The International Energy Agency and industry analysts report that while China mines about two-thirds of the world’s rare-earth ore, it also dominates the processing and manufacturing stages that transform those materials into usable components. Goldman’s co-head of global commodities research, Daan Struyven, estimates that building a mine would take around a decade, and constructing a refinery would take about five years.

In recent months, China has imposed export controls on several rare-earth elements used in military applications, citing national-security concerns. The move is seen as a response to Washington’s curbs on advanced semiconductors and chipmaking equipment introduced since late 2022. The US has been working to prevent China from developing high-end chips that could enhance its military and artificial-intelligence capabilities.

The trade tensions between the US and China have been escalating, with US President Donald Trump stating that the two countries are “effectively in a trade war.” Trump has threatened to impose an additional 100% tariff on Chinese goods starting in November, while China has vowed to “fight to the end.” However, officials from both sides have been working on a potential trade framework that could avert the US tariff hike and lead to reciprocal steps by China on export controls.

A meeting between Trump and Chinese leader Xi Jinping is scheduled for Thursday in South Korea, where they are expected to discuss the trade dispute. The outcome of the meeting could have significant implications for the global supply of rare earth minerals and the ongoing trade tensions between the US and China. As the world’s reliance on these minerals continues to grow, the need for a stable and diverse supply chain becomes increasingly important.