China controls 90% of the world’s processed rare earths, giving it leverage over global manufacturing as U.S. President Donald Trump and Chinese President Xi Jinping prepare to meet Thursday in their second summit of the year.
Rafael Moreno, managing director of Australia-listed Viridis Mining and Minerals, said ending China’s grip on the raw materials used in cars, wind turbines and military jets is essential, and called a deal to ease Beijing’s export threat necessary. “The market is nervous,” he said.
China first brought in controls on rare earth exports in April 2025, hitting auto industries in the EU, UK, U.S. and Japan. After a summit last October with Trump in South Korea, Xi agreed to suspend the introduction of even stricter global restrictions, but only for 12 months.
Industry leaders had hoped Trump would extend the suspension at the leaders’ summit Thursday. “It cannot not be extended if they are to continue to have these presidents’ meetings regularly,” said Kurt Tong, a managing partner at the Asia Group, a Washington advisory firm.
Tong said a suspension deal could be delayed until November, when Trump is expected to attend the Asia-Pacific Economic Cooperation forum of 21 countries in China.
Supply diversification away from China is a priority for European Commission president Ursula von der Leyen. Viridis has opened a demonstration plant at its mine in Minas Gerais, Brazil, producing a powder to be further separated, potentially in France, and is working with French chemical company Solvay on processing.
Moreno said the project aims to capture about 5% of the world’s rare earths market, with production starting at the end of 2028. The company hopes to supply European carmakers and wind turbine manufacturers such as Siemens Gamesa.