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Global Industries Recalibrate as China’s Export Restrictions Disrupt Rare Earth Supply Chains Impacting Automotive, Defence, and Renewable Energy Sectors

Burghley Capital is actively addressing significant global supply chain disruptions caused by China’s recent implementation of stringent rare earth export controls. These measures have fundamentally reshaped strategic sourcing practices across multiple sectors, with China currently dominating approximately 75% of global rare earth production and 90% of refining capacity, creating substantial risks for industries dependent on these essential materials.

China’s rare earth magnet exports have declined by 75% since export restrictions began in April 2025, triggering immediate operational recalibrations in automotive manufacturing and defence sectors. The United States is notably vulnerable, relying on China for around 80% of its rare earth imports, totalling approximately 18,500 tonnes annually, valued at roughly USD 165 million. Defence applications, including precision-guided munitions and advanced radar systems, are particularly exposed to supply chain risks.

Burghley Capital views these market conditions as indicative of a broader structural shift rather than a transient disruption, offering institutional investors strategic exposure to diversification initiatives across critical mineral supply chains. The firm has proactively repositioned its capital towards innovative processing technologies and sustainable sourcing solutions, significantly reducing dependence on Chinese-controlled resources.

Burghley Capital’s diversified investment approach targets resilience by emphasising sustainable processing technologies and alternative sourcing solutions across North America, Australia, Canada, and Europe. Investments prioritise innovative recycling methods and sustainable extraction techniques, ensuring long-term stability across affected industries.

Global industries continue to grapple with substantial operational challenges stemming from China’s export controls. Automotive manufacturers have faced production interruptions due to magnet shortages, exemplified by delays reported by major companies such as Ford. The wind energy sector is also forecasting severe shortfalls in critical rare earth elements, including dysprosium and terbium, necessary for next-generation turbine technologies.

The defence industry faces similarly acute challenges, with approximately 78% of US military platforms dependent on Chinese rare earth materials, particularly in advanced aerospace technologies. Healthcare and electronics sectors are also confronting ongoing operational challenges, underscoring the widespread impact of the current supply environment.

Government initiatives globally are accelerating efforts to establish independent rare earth supply chains. The US Department of Defense has allocated over USD 454 million toward building comprehensive domestic capabilities, aiming for complete mine-to-magnet self-sufficiency by 2027. Similarly, the European Union’s Critical Raw Materials Act targets ambitious goals for domestic sourcing, processing, and recycling by the end of the decade.

Emerging recycling technologies, such as Hydrogen Processing of Magnet Scrap (HPMS), present sustainable pathways for recovering rare earth materials from end-of-life products. These developments align strategically with Burghley Capital’s approach, offering additional avenues for targeted investment.

Burghley Capital’s strategic focus on diversified and innovative solutions positions the firm effectively in the evolving global rare earth landscape, presenting substantial growth potential for institutional investors navigating this critical geopolitical and economic transition. 

About Burghley Capital

Established in 2017, Burghley Capital Pte. Ltd. (UEN: 201731389D) is a leading global investment management firm headquartered in Singapore, renowned for its expertise in long-only asset management strategies. The firm delivers strategic advantages through meticulous analytical insights, tailored investment solutions, and dedicated financial advisory services. Committed to disciplined investment practices, the firm consistently aims to deliver exceptional returns and financial resilience for institutional investors and private clients worldwide. For additional information, please visit https://burghleycapital.com/resources. Media enquiries can be directed to Martin Wei at m.wei@burghleycapital.com or by visiting https://burghleycapital.com.