The Race for Rare Earth Minerals Intensifies with U.S.-Saudi Agreement and China’s Strategic Moves

On May 14, 2025, at the U.S.-Saudi Investment Forum in Riyadh, MP Materials and Saudi Arabia’s Maaden signed a memorandum to develop a rare earth supply chain.

This deal, alongside China’s acquisition of an Australian miner, reveals a fierce contest for critical minerals driving technology and defense. Rare earth elements, 17 metals like neodymium, power magnets in electric vehicles, wind turbines, and missiles.

China controls 70% of global mining and 90% of refining, leveraging this dominance amid U.S. trade tensions. The U.S.-Saudi pact aims to counter this by building a full supply chain in Saudi Arabia.

MP Materials operates Mountain Pass, America’s only rare earth mine, producing 12,213 metric tons of concentrate last quarter. Maaden, backed by Saudi Arabia’s $2.5 trillion mineral reserves, seeks to make mining a key economic pillar.

This partnership aligns with Saudi Vision 2030, diversifying from oil dependency. Meanwhile, China’s Shenghe Resources acquired Peak Rare Earths for $97 million, securing Tanzania’s high-grade Ngualla project.

This move ensures China’s supply for its magnet industry, which produces 90% of global demand. Beijing’s export controls on seven rare earths in April 2025 tightened its grip.

U.S.-Saudi Rare Earths Deal Signals Strategic Shift

The U.S.-Saudi deal, signed as Saudi Arabia pledged $600 billion in U.S. investments, strengthens bilateral ties. It promises to reshape supply chains for robotics and AI, reducing reliance on China.

However, building refining facilities costs $1-2 billion, and environmental challenges, like water scarcity, loom large. Other nations pursue alternatives. Australia’s Lynas expands processing, while Canada develops mines.

Japan recycles rare earths from electronics. Yet, China’s cost advantages and infrastructure pose hurdles for competitors, making the U.S.-Saudi venture a bold but risky bet.

This race reflects mercantile priorities: securing resources for economic and strategic advantage. Demand for rare earths, driven by clean energy and defense, grows rapidly.

A single electric vehicle motor needs 1-2 kilograms of magnets, and a wind turbine uses hundreds. The U.S.-Saudi agreement and China’s acquisition highlight a pivotal moment.

Nations vie for control over minerals shaping technology’s future. Success hinges on investment, innovation, and navigating environmental constraints, with global supply chains hanging in the balance.