The global scramble for rare earths and other critical minerals is accelerating, and financial advisory giant deVere Group believes it will be one of the defining investment themes of 2026 as the United States and China intensify their fight for control of the materials powering the modern economy.

Nigel Green, chief executive of deVere Group, says rare earths have moved from the periphery of the commodities market to the centre of global strategy.

“The battle to secure them will shape trade, technology, and investment decisions for years to come,” Green told BTR.

In its latest report, Moody’s Ratings said the exponential growth of AI around the globe is increasing demand for rare earths and other critical minerals. However, geopolitical tensions around critical minerals, and particularly rare earths, metallic elements with unique properties used in AI and other high-tech industries, are increasing vulnerabilities for tech firms across the AI supply chain.

“Demand could reach 153,000 metric tonnes of rare earth oxides (REOs) by 2040, a 65.5% increase over 2023,” according to the International Energy Agency’s (IEA’s) stated policies scenario.

A McKinsey report reveals that global demand for magnetic rare earth elements is projected to triple — from 59 kilotonnes in 2022 to 176 kilotonnes by 2035. This sharp rise is driven by booming electric vehicles adoption and the rapid expansion of wind power projects.

China Dominates the Market

The minerals, which are essential for electric vehicles, smartphones, and advanced weapons systems, have long been dominated by China. It currently controls around 70% of mining and close to 90% of processing capacity, leaving global manufacturers heavily exposed to Chinese policy decisions.

That dominance is now being challenged. The Trump administration has made rare earths a national priority, pouring money into domestic and allied production.

It has taken stakes in North American miners, proposed a government-backed price floor to stabilise supply, and set out plans to build a strategic mineral reserve. Permitting processes are being fast-tracked, and environmental rules have been eased to accelerate mine construction under the so-called “mine, baby, mine” policy.

“Washington’s intervention marks the start of a new industrial cycle. The US wants to reclaim control of its supply chains and reduce its vulnerability to Beijing. This is not just policy theatre; it’s the largest coordinated push for resource security in a generation,” according to Nigel Green.

Nigel Green, chief executive of deVere Group, said rare earths are at the crossroads of industrial policy, clean energy, and national security.

At the same time, China has tightened its own grip. Beijing has imposed new export controls requiring companies to obtain approval before shipping magnets that contain even trace amounts of Chinese-sourced rare earths. It has also added five more elements, namely holmium, erbium, thulium, europium, and ytterbium, to its restricted list.

Moody’s Ratings said China’s dominance in rare earth extraction and processing underpins the global AI hardware ecosystem — particularly through critical components like neodymium-based magnets and gallium semiconductors — making Western AI, defence, and communications infrastructure increasingly vulnerable to Chinese export controls and supply chain disruptions.

“China is showing that control of supply means control of markets. The US and its allies are now being forced to build alternative supply chains, which is driving an unprecedented wave of investment across Australia, North America, and parts of Africa. The financial markets are following the geopolitics,” says deVere’s CEO.

He said the investment implications are significant. “This is a multi-year transformation, not a short-term story. The infrastructure and refining capacity cannot be built overnight. Investors positioning early will benefit from the sustained capital flow into strategic resources.”

In a statement to BTR, deVere analysts expect continued volatility in the sector as governments intervene and policy announcements move prices.

Nigel Green said these markets will not move on earnings alone. “They’ll move on policy. Every export restriction, every government stake, every strategic partnership will have a market impact. This volatility can create opportunity for disciplined investors.”

He continues: “Diversification across the supply chain, from mining to refining to recycling technologies, will be key. This is about securing the systems that keep economies running. Investors who recognise that will be the long-term winners.”

Nigel Green concludes: “Rare earths are at the crossroads of industrial policy, clean energy, and national security. The competition to control them will define 2026. The scale of investment already underway shows how quickly the world is recalibrating to a new economic reality. It’s a once-in-a-generation shift in where value is being created.”