China’s advantage in rare earths extends far beyond mining and refining. The country also dominates the manufacturing of the high-performance permanent magnets that turn rare earth materials into components used in electric vehicles, wind turbines, industrial motors, robotics and defence systems.
JL MAG Rare-Earth Co. offers a clear example of the scale China has developed in this downstream industry. The company has expanded production rapidly while operating within the industrial ecosystem around Baotou, one of China’s major rare earth centres.
Its growth also highlights a wider challenge for countries trying to diversify rare earth supply chains. Developing new mines is only one step. The materials must still be separated, refined, converted into alloys and manufactured into finished magnets.
China’s biggest advantage comes downstream
The scale of China’s position becomes clearer when the supply chain is separated into stages.
The International Energy Agency estimates that China accounted for about 60% of global mined production of magnet rare earths in 2024. Its share rose to about 91% of refined output and 94% of global sintered permanent magnet production.
That final figure is particularly important. Sintered permanent magnets are the high-performance products required for many applications across the automotive, energy, industrial and defence sectors.
The IEA says permanent magnets account for about 95% of rare earth consumption by value. Demand for magnet rare earths has doubled since 2015 and is expected to grow by another third by 2030 under current policies.
China’s extensive magnet manufacturing base also creates economies of scale and provides a large, stable market for upstream rare earth materials, according to the IEA.
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JL MAG has built significant production scale
JL MAG says it became the world’s largest rare earth permanent magnet producer by production and sales volume in 2024.
The company reported magnetic-material sales of 25,282 tonnes in 2025, an increase of 21.25% from the previous year. Its production capacity has reached about 40,000 tonnes a year, with a target of 60,000 tonnes of high-performance rare earth permanent magnets by 2027.
A major part of that expansion is taking place in Baotou.
JL MAG has proposed a 20,000-tonne-per-year Green Intelligent Manufacturing Project in the city. The company says the project would take its overall annual capacity to 60,000 tonnes once completed.
The importance of Baotou goes beyond a single factory. The city sits within a broader rare earth industrial cluster that includes processors, magnet manufacturers, research institutions and related infrastructure.
That concentration connects manufacturers with upstream materials and specialised industrial capabilities. It also allows companies to operate within a supply chain that has developed over decades.
From rare earth materials to finished magnets
JL MAG’s position also reflects the depth of its manufacturing operations.
The company says its capabilities cover product and mould development, production of NdFeB permanent magnet blanks, finished-product processing, surface treatment and grain-boundary diffusion technology. It operates manufacturing facilities in Ganzhou, Baotou and Ningbo.
Its products are used in new-energy vehicles, automotive components, variable-frequency air conditioners, wind power equipment, industrial servo motors, elevators and rail transit.
JL MAG is also expanding into magnetic components for robotics. Its disclosures say production lines for humanoid robot motor rotors are operational and have begun small-batch deliveries.
The broader point is significant. China’s position is not based simply on access to rare earth ore. It includes the industrial capacity to turn processed materials into finished magnets at large scale.
The US is rebuilding its downstream capacity
The United States is now investing in several parts of the same chain.
MP Materials, for example, has moved beyond mining and separation at Mountain Pass. Its Fort Worth Independence facility produced its first NdFeB magnets on commercial equipment in 2025.
The company is also developing its planned 10X magnetics campus in Northlake, Texas. MP Materials says the project involves more than $1.25 billion in investment and is expected to take the company’s total US NdFeB magnet production capacity to about 10,000 tonnes a year once operational. Commissioning is expected to begin in 2028.
That is an important shift in the US strategy. The objective is no longer simply to secure alternative sources of rare earths. It is also to rebuild the processing, metallisation, alloying and magnet-manufacturing stages that sit further downstream.
Rare-earth-free magnets offer another route
Niron Magnetics is pursuing a different approach.
The US company is developing permanent magnets based on iron nitride rather than rare earth materials. Niron has proposed a 1.6-million-square-foot high-volume manufacturing plant capable of producing up to 10,000 tonnes of Iron Nitride magnets a year.
The company estimates that the proposed facility could represent about 1–2% of the global permanent magnet market once operational.
The technology could add another source of permanent magnets outside the conventional rare-earth supply chain. However, its proposed capacity is not directly comparable with JL MAG’s 60,000-tonne target because the companies are producing magnets based on different chemistries and for potentially different applications.
Export controls exposed the supply-chain risk
China’s downstream position became more visible after Beijing introduced rare earth export controls in 2025.
The measures disrupted supplies to some manufacturers and highlighted the dependence of international industries on Chinese processing and magnet production. The IEA reported that some automakers struggled to secure supplies during the disruption, while non-China magnets remained more expensive even after export volumes began to recover.
The episode demonstrated the difference between having access to rare earth resources and having a complete industrial supply chain.
The IEA now identifies magnet manufacturing as the main bottleneck for supply diversification. It notes that planned projects outside China are expanding mining capacity much faster than downstream capacity for metals, alloys and finished magnets.
The competition is moving beyond the mine
JL MAG is not responsible for China’s overall rare earth dominance. Its importance is that the company illustrates how that dominance has been converted into large-scale downstream manufacturing.
China’s 94% share of global sintered permanent magnet production in 2024 reflects a much broader industrial ecosystem. JL MAG is one major producer operating within that system.
For the US and its allies, the challenge therefore extends beyond securing alternative rare earth deposits. New mines need processing facilities, metal and alloy production, magnet plants, technical expertise and customers capable of supporting those operations.
The strategic question is no longer only who has the rare earths.
It is also who can turn those materials into the magnets that modern industries need.
