Supply and logistics disruptions linked to the Strait of Hormuz are pushing oil and gas prices higher. This is accelerating the shift toward renewables for energy security and elevating rare earth elements (REEs) to the status of "new oil."
The de facto closure of the strait following US and Israeli strikes on Iran has disrupted global energy flows and triggered sharp price gains, turning investment in electric vehicles and renewable energy from a policy choice into a national security imperative.
These dynamics are boosting the strategic value of inputs used in clean energy technologies, while the concentration of supply in a handful of countries is placing REEs at the center of energy and economic security debates.
- China's dominance heightens supply risks
Demand for REEs used in permanent magnets, including neodymium, praseodymium, dysprosium and terbium, is set to rise by more than 30% by 2030, according to the International Energy Agency.
As of 2024, China accounts for around 60% of global mined output of these materials and more than 90% of refining. Its share in permanent magnet production has surged from about 50% in 2005 to over 90% in 2024.
The report underscores that Beijing's export controls have exposed the fragility of supply chains reliant on a single country, warning that broader restrictions could lead to significant production losses across the global economy.
- REEs emerge as critical input in new energy era
Despite their relatively small market size, REEs underpin end-use industries worth trillions of dollars, founder of Turkish Critical Minerals Initiative, Sait Uysal told Anadolu.
"REEs are assuming a role similar to that of oil in the past, emerging as a critical input for the new era," Uysal said.
He added that risks around key transit chokepoints such as the Strait of Hormuz, combined with the concentration of REE supply chains in China, are increasing global vulnerabilities and creating new dependencies in the energy transition.
- Türkiye could emerge as alternative
Uysal said China's dominance in REEs goes beyond commercial advantage, acting as a geopolitical lever, adding that export controls introduced last year exposed structural vulnerabilities in the global economy by triggering short-term disruptions.
He noted that the issue extends beyond energy security to the "security of the energy transition," and said, "China's dominance stems less from geological advantage and more from long-term state policies implemented since the 1980s and reinforced by strategies such as 'Made in China 2025.' Therefore, this man-made monopoly can also be overcome through the right strategies, high-tech investments, international cooperation and sound policies."
Uysal pointed to the Beylikova deposit in Türkiye as a potential alternative to China.
According to Türkiye's Mineral Research and Exploration General Directorate (MTA), reserves exceed 1.3 million tons, which Uysal said could play a game-changing role in global supply chains.
He added that the Beylikova Rare Earth Elements Pilot Facility could serve not only as a mining site but as a strategic springboard for Türkiye if an integrated ecosystem, spanning mining to magnet production, is established, enabling the country to become a key player shaping and de-risking global supply chains.
- Global race for critical raw materials intensifies
Caner Zanbak, environmental coordinator at the Turkish Miners' Association, said China's near-monopoly in raw materials and permanent magnet production, coupled with export restrictions, is pushing countries toward new strategic partnerships, while also fueling competition among non-China alliances.
"Competition among collaborations outside China is likely to become more visible. The World Trade Organization's principle of 'free global trade' does not appear easy to implement in this space," he said.
Zanbak noted that rapid growth in electric vehicles, wind turbines and electrification-driven advanced technologies is expected to drive a sharp increase in demand for permanent magnets globally.
"The projection that demand for these elements will rise by more than 30% by 2030 signals the emergence of intense global competition in raw material supply, particularly for electric vehicles and other next-generation technologies," he said.
"In fact, considering current geopolitical developments, we can say that the global race for critical raw materials has already begun," Zanbak concluded.
By Duygu Alhan
Anadolu Agency
energy@aa.com.tr
