Rare earth elements (REEs) are not a single mineral, but a family of 17 metallic elements, the 15 lanthanides plus scandium and yttrium. These are “relatively abundant” yet difficult to extract and refine economically because they occur in low concentrations and require complex separation chemistry. Their importance is disproportionate to their volume: tiny quantities enable the high-performance components that power the modern economy and, increasingly, modern warfare.
What rare earths do — and why states treat them as strategic?
REEs are indispensable in permanent magnets, especially neodymium-based magnets used in electric motors and generators. These magnets sit inside electric vehicles, wind turbines, robotics, consumer electronics, industrial motors and data centres. Beyond the green economy, rare earth magnets are also embedded in defence supply chains. The US Department of Defense has publicly framed a “mine-to-magnet” priority, emphasizing assured access to REEs needed for permanent magnets used in key US weapons systems. The same category of magnets appears in platforms such as the F-35 and a wide range of unmanned and advanced defence systems (the precise mix is classified, but the dependence is repeatedly acknowledged in official US industrial-based communications). This is why REEs show up in US national “critical minerals” strategies: a disruption is not just an inconvenience for manufacturers; it can become a national security vulnerability.
The real chokepoint is not mining but processing and magnets
The global market fragility is rooted in concentration downstream. Reuters, citing consultancy AlixPartners, has reported estimates that China controls up to 70% of global rare-earth mining, 85% of refining capacity and 90% of rare-earth metal alloy and magnet production. The International Energy Agency (IEA) has underlined how this dominance translates into trade leverage: in 2024, China exported about 58,000 tons of rare earth magnets, enough for millions of cars or vast volumes of industrial and strategic equipment.
A simple picture of the vulnerability (approximate, based on Reuters/AlixPartners) looks like this:
This distribution matters for Pakistan because it clarifies where value and leverage sit. Owning ore is not the same as owning capability. Refining, separation, metallurgy and magnet production are where countries move from geology to industrial power.
Why Trump's Greenland talk matters (even when he denies the minerals angle)
President Trump's renewed Greenland signalling illustrates how critical minerals and security geography are now intertwined. Speaking at Davos on January 21, 2026, Trump said he wanted “immediate negotiations” to acquire Greenland, framing it as a national security issue, and explicitly stated the motivation was not rare earth minerals. Whether or not rare earths are the stated driver, Greenland's mineral narrative is impossible to separate from the wider strategic context: Arctic security, Russia–China competition and access to resources in jurisdictions perceived as “reliable” by Western capitals. A CSIS analysis, published in January 2026, similarly situates Greenland in the intersection of Arctic security and critical minerals.
For policymakers in Islamabad, the Greenland episode offers two lessons:
1. Critical minerals are now a geopolitical language: they shape alliances, investment flows and bargaining power.
2. Even high-profile mineral narratives collide with sovereignty, regulation, environmental politics and social license; meaning resource diplomacy alone cannot substitute for credible governance and industrial planning.
Pakistan's “rare earth moment”: symbolism meets an emerging deal pipeline
Pakistan has recently entered the critical minerals conversation through a US-linked commercial and diplomatic channel. Dawn reported in September 2025 that Missouri-based US Strategic Metals (USSM) signed a $500 million MoU with Pakistan to invest in the critical minerals sector, with early phases envisaging exports of minerals, including rare earth elements. Subsequent reporting described the dispatch of mineral samples to the US to advance the arrangement, noting the shipment included rare earths such as neodymium and praseodymium whose high-strength alloy formed with magnesium is used in aircraft engines, prepared locally in collaboration with the Frontier Works Organization. The Associated Press also reported the deal, and highlighted a plan connected to processing facilities in Pakistan.
Does Pakistan have real potential beyond headlines?
Pakistan's resource case should be discussed carefully: “potential” is not the same as “proven reserves.” Still, there are meaningful scientific signals. A 2024 abstract indexed by ADS describes national-scale work on REE distributions in Pakistan's stream sediments, reflecting the type of baseline geochemical mapping used internationally to identify prospects. Pakistan also has a broader pipeline of large mineral projects (not necessarily REEs) that make the governance challenge real: for example, the Financial Times reported international financing movement around Reko Diq (copper-gold) as part of the wider global race for critical minerals. For rare earths specifically, the immediate policy point is not to over-claim. Pakistan must move from mapping and anomalies to bankable resource definition — drilling, mineralogy, metallurgical testing and internationally credible reporting. The REE projects fail most often not because the elements are absent, but because the mineralogy and separation economics do not work at scale, or because environmental and radioactive byproduct risks (e.g. thorium in some ores) are not managed credibly.
The global opportunity — and the trap
The opportunity is straightforward: as China tightens export controls and licensing, global manufacturers and governments look for diversification. Reuters has recently reported how magnet trade flows are already being reshaped by geopolitical tensions and restrictions.
The trap is also clear: if Pakistan only exports raw or semi-processed material, it will capture a small fraction of value while remaining exposed to price cycles, security risks, and governance controversies. In a value chain dominated by processing and magnets, the long-term prize is industrial capability, not just extraction.
What should Pakistan do next?
1. Start with credibility: know what Pakistan actually has before talking big deals or exports. Pakistan needs to clearly establish what rare earth resources it truly possesses and in what quantities. This requires a coordinated national programme led by the Ministry of Science and Technology, the Geological Survey of Pakistan, provincial minerals departments and reputable international laboratories. The focus should move beyond surface indicators to proper drilling, testing of rock samples, and analysis of how easily the minerals can be processed. Publishing verified, non-sensitive data in standard international formats will build investor confidence. Without this level of clarity, Pakistan will struggle to attract serious long-term buyers or responsible investment.
2. Capture value where it matters: process, don't just dig. The real power in rare earths lies not in mining alone, but in processing them into usable materials, especially those needed for high-performance magnets. Any agreement or MoU should therefore require partners to gradually build processing capacity inside Pakistan, starting from basic upgrading of ore, moving to refined chemical products, and eventually to separated rare earth oxides. This must be backed by environmental safeguards, workforce training and technology transfer. Otherwise, Pakistan risks exporting raw material cheaply while importing expensive finished components, missing the strategic and economic gains that rare earths can offer.
Bottom line
Rare earths are the “vitamins” of modern industry — but the geopolitics is about where the vitamins are refined, turned into magnets, and embedded into defence and industrial systems. Trump's Greenland signalling shows how minerals now sit inside security diplomacy, even when leaders publicly deny a 'minerals motive'. Pakistan's recent US-facing minerals outreach may be an opening, but it will only translate into durable national gain if Islamabad builds credible resource data, pursues downstream capability and governs the sector transparently enough to attract serious partners.
The writer is a Civil Servant, Author, Economist and a Public Policy Analyst)
