NEW ANALYSIS on Countries with Rare Earth Element Reserves: A Peddling Peril Index 2025/2026 Teaser
The PPI 2025/2026 is the forthcoming, fifth edition in a biennial series collecting qualitative and quantitative data in five areas of strategic trade controls. The underlying data contain information on 200 countries across 106 indicators, and different methods of presenting and analyzing the data are discussed, including statistical analysis and case studies. In addition to a final ranking of the 200 countries, territories and entities evaluated in the PPI, examples of evaluating the countries in groups are included, such as grouping countries by supply potential of WMD-related items and technology, to acknowledge and draw out different needs for—and challenges posed to—strategic trade control systems across countries. A subset of evaluated countries is presented here, namely those that have rare earth element deposits or reserves.
The PPI team evaluated 16 countries that have the largest rare earth elements (REEs or rare earths) deposits. Rare earth elements are a group of 17 metallic elements recognized for their importance in the modern production of advanced technologies, military weapon systems, and industrial goods; they are therefore dual-use goods. The 16 countries are (listed alphabetically): Australia, Brazil, Canada, China, Greenland*, India, Madagascar, Malaysia, Myanmar, Nigeria, Russia, South Africa, Tanzania, Thailand, United States, and Vietnam. These countries should prioritize their ability to control the entire REE process, from separation, refining, to alloying and end-product manufacturing.
China’s control of the REE supply chain poses unique challenges. Countries effectively need to build their own domestic industries to insulate themselves from coercive trade practices, but this is difficult in a market dominated by price pressures and dictated by supply and demand. For new supply chains to be profitable and sustainable, governments can help by providing financing to alleviate concerns and provide incentives to develop the projects in the first place. But as the PPI demonstrates, simply funding new supply chain elements alone is not enough to prevent China’s aggressive expansion. Countries will need to leverage export controls and inbound foreign direct investment controls to prevent the exploitation of their domestic resources. This can be done by strictly monitoring and evaluating the companies seeking access to domestic natural resources, and determining the level of ownership these companies would have, and who are the true beneficial owners of the companies themselves.
Applying the results of the PPI to the group of 15 countries (no PPI results are available for Greenland, see footnote 1) with the largest deposits of REE’s can reveal some interesting insights into the strengths and vulnerabilities facing these countries as they develop their domestic resources.
As a group, the countries on average scored 735 points, or 56 percent of the total 1,300 points available in the PPI. The points varied widely from some of the best scoring countries, including the United States, to some of the worst scoring countries, including Myanmar (see Figure 1).
Inbound Foreign direct investment (FDI) controls play a vital role in how countries can protect investments in their domestic REE resources. Countries with poor inbound FDI controls are less able to assess and vet the risks posed by foreign companies or governments making investments into domestic REE operations, increasing the possibility that domestic resources can be fully purchased and owned by a foreign entity. Nine of the 15 countries received full points in the FDI sub-criterion, meaning these countries have a dedicated mechanism to screen inbound investments which allows screening for national security purposes (see Figure 6). Six of the countries have neither dedicated FDI screening mechanisms nor screen FDI in sectors relevant to national security and did not earn any points. These six countries are highly vulnerable to foreign exploitation.
Internal stability and corruption are major considerations in how well a country can manage and protect its REE resources. Poor internal stability limits the ability of the government to effectively govern its territory and maintain stable long-term policies that enable businesses to form long-term plans and investments. Of the 15 countries assessed here, eight of them are listed in the bottom half of the Global Corruption Index (GCI) for 2023, ranking them amongst some of the most corrupt countries in the world. This includes Myanmar, Madagascar, Nigeria, Viet Nam, Tanzania, Russia, China, and Thailand. As seen above, four of those countries, Myanmar, Madagascar Tanzania, and Nigeria, lack inbound FDI controls, meaning they are especially vulnerable to exploitation.
Read the full report with additional findings and recommendations here:
isis-online.org/isis-reports… and read more about the Peddling Peril Index series here:
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