IEA warns China rare earth curbs put $6.5T in production at risk (REMX:NYSEARCA)

The agency modeled a scenario where China halts all rare earth exports for six months. Global GDP would contract by roughly 1.5%, or $1.6 trillion, with the automotive and electronics sectors hit hardest. The U.S., Europe and Japan hold strategic stockpiles, the IEA noted. Those cover only 30 to 60 days of demand for key elements like neodymium and dysprosium, which are critical for permanent magnets in EVs and wind turbines.

Shares of the VanEck Rare Earth/Strategic Metals ETF (REMX) rose 2.8% on the report. Investors priced in tighter supply and higher prices for producers outside China. Lynas Rare Earths, the largest non-Chinese producer, gained 4.1% in Sydney trading.

The IEA called for accelerated investment in alternative supply chains, including Australia's Mount Weld deposit and U.S. projects in California and Texas. It cautioned that new mines take 10 to 15 years to reach full output. "The window to diversify is closing," the IEA said. "The next five years will determine whether the global economy can absorb this risk."