GOOD MORNING FROM LONDON
CHINA AND THE FOREIGN MEDIA
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HOW DEPENDENT IS THE U.S. ON CHINA’S RARE EARTH SUPPLY?
SOUTH CHINA MORNING POST.
“China dominates the global supply of rare earths including more than 90 per cent of the world’s processing and refining. It also has an edge in most other critical minerals, such as refined gallium, of which it controls 98.8 per cent of the output.
In recent years, Beijing has leveraged its dominance in critical mineral production and refining as a key negotiating point in trade wars, as well as targeting defence industries in the United States and its allies.
In July 2023, Beijing imposed controls requiring exporters to seek permission to ship eight gallium-related and six germanium-related products abroad. The list was expanded to include antimony in August 2024.
In December, the Chinese Commerce Ministry imposed export bans on gallium, germanium and antimony to the United States, which affects American military end users.
In April, Beijing imposed trade restrictions requiring a special export licence for seven categories of medium and heavy rare earth elements (REE) – samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium – as well as magnets and other finished products that contain them to be shipped out of China.
Why it matters
These elements are essential to various American advanced weapon systems, including precision-guided missiles, fighter jets, naval warships, submarines and advanced radar systems.
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Fighter jets: F-35 fighter jets contain over 400kg (900lbs) of REEs per unit for its jet engines, avionics, munitions and radar.
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Washington’s latest Next-Generation Air Dominance (NGAD) fighter, the F-47, is also likely to include a substantial amount of critical minerals, considering the incorporation of cutting-edge technologies, such as unmanned aircraft and artificial intelligence.
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Naval ships and submarines: Virginia-class submarines use 4,200kg and Arleigh Burke-class destroyers require 2,360kg of REEs for their radar, munitions and other technologies.
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Predator drones, Tomahawk missiles, Joint Direct Attack Munition (JDAM) smart bombs, and advanced radar systems all rely on rare earth magnets for propulsion, targeting and guidance.
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More than 80 per cent of the Pentagon’s weapons system supply chains reportedly incorporate antimony, gallium or germanium.
In most of the applications, these materials cannot be substituted, meaning that the Chinese export restrictions make the US defence industry supply chain more vulnerable, not just by limiting material supply but by blocking access to separation and refining technology critical to building independent US capacity.
While the Pentagon has invested more than US$439 million towards building domestic supply chains in critical minerals since 2020, and awarded MP Materials US$35 million for a heavy rare earths processing facility in 2022, a significant amount of work is still needed to create a critical mineral supply chain independent from China.
Only one location in the US – the Mountain Pass mine in California’s Mojave Desert – currently produces rare earths. While it accounts for about 15% of global production, the US still has to import most of its rare earth minerals and refined products from China.
To produce neodymium magnets, MP Materials last year announced record production of 1,300 tonnes of neodymium-praseodymium (NdPr) oxide, while China produced an estimated 300,000 tonnes of NdFeB magnets the same year.
The US does not have any known mining facilities for gallium, while China produced 750 out of 760 tonnes of primary low-purity gallium worldwide in 2024 and is known to have a production capacity of up to 1,000 tonnes.
China restricts critical metal exports following Western semiconductor curbs in latest trade war.
China reportedly accounts for around 48% of the world’s mined antimony, controls 98.8% of refined gallium production, and is responsible for 59.2% of refined germanium output. These minerals are used in various military settings, ranging from bullets, night vision goggles and cables, to nuclear weapons and naval warships.
In January 2025, USA Rare Earths produced its first high-purity dysprosium oxide sample of up to 99.1% using ore from the Round Top deposit in Texas, but it still remains lab-scale, and work must be done to transition to commercial-scale production.
US defence systems are deeply reliant on critical minerals, and China’s tightening grip on exports, tech, and production could accelerate their supply chain disruption. Without fast-tracked domestic capacity and cooperation with allies in critical mineral production, the US could potentially face challenges in strategic preparedness in the Indo-Pacific region.
GRAHAM PERRY COMMENTS;-
Two dates to bear in mind – First, 1949 when Mao Tsetung announced the inauguration of the People’s Republic of China. China was in a dreadful state after thirty years of Civil War against the KMT and fourteen years of National Patriotic War against Japan.
China was known across the globe as The Sick Man of Asia. The world dismissed Mao and his peasant based military force but the Party knew better. Life was not a linear progression to prosperity. Far from it. China struggled to provide the basic means of subsistence as they dealt with the adverse consequences of the Great Leap Forward and the Cultural Revolution. But in 1979 Deng Hsiaoping was given his head and he presided over a big turnaround in the economic fortunes of the nation.
The Tiananmen Square Deaths of 1989 are not overlooked and will be addressed in a forthcoming issue.
It brings us to the second significant date – 2018 – the year when the U.S. made clear that it was going to squeeze China till the pips squeaked. Washington decided to cease the exports of semiconductors to China in a determined effort to obstruct China’s economic progress.
Beijing got the message. The writing was on the wall. The U.S. was going to do its very best to stop China. As a consequence China set about making itself the world’s monopoly supplier of Rare Earths – an indispensable component of a modern industrial economy.
Today China has made much more progress in its production of Semiconductors in China than the U.S. has made in its production of Rare Earths in the U.S.
The U.S. is on the back foot.
China knows there will be a trade resolution of the current Tariffs dispute and it will involve both Semiconductors and Rare Earths but the balance of economic and political power will tip away from the U.S. and towards China. This is the significance of the present dispute and will form part of the agenda for the talks commencing in London on 9 June 2025.
In June 2024, at a national science and technology conference, President Xi Jinping said that the high-tech sector had become “the frontline and main battlefield of international competition, profoundly reshaping the global order and the pattern of development.” He is right. The United States and China compete for economic, military, and diplomatic dominance through the development of new technologies, including those with both military and civilian applications.
Since announcing the “Made in China 2025” plan in 2015, Beijing has invested in a whole-of-government focus on advancing critical emerging technologies. Now, China is giving the United States a run for its money;-
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In the fourth quarter of 2024, the Chinese automaker BYD surpassed Tesla in sales of battery electric vehicles.
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In addition to being bigger than Tesla, BYD is more inventive, with vehicles that can slide sideways into parking spots and float during emergencies, and chargers that can replenish up to 250 miles of range in five minutes—several times faster than Tesla superchargers.
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The state-owned Commercial Aircraft Corporation of China will release plans for a long-range supersonic jet that produces supersonic booms no louder than a hairdryer.
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In March 2025 Beijing sent quantum-encrypted images to South Africa using a small, cheap satellite—an enormous advance in quantum communications.
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Additionally, China has more new public fusion projects, fusion patents, and fusion Ph.D.s than any other country.
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China leads the world in the production of Rare Earths – the indispensable component in the construction of a modern economy, and essential to various American advanced weapon systems, including precision-guided missiles, fighter jets, naval warships, submarines and advanced radar systems
China is going to invent its way around whatever roadblocks Washington imposes. And don’t forget DeepSeek – China’s Sputnik Moment.
Arrogance? Boasting? Big Power Chauvinism? No. China is not travelling down that path. Yes, China will feature more prominently in every aspect of economic advance but it will do so without trying to become the new economic superpower. It will out-achieve the U.S, but without any intention to become a superpower.
GRAHAM PERRY
Tiananmin Square – just a taster for a longer article shortly to follow.
The downside – China got it wrong. The Army was turned on the protestors. People did die. Order was restored but at a cost – Chinese citizens were killed and China’s international reputation took a dive. But why? Why did it happen? Why were their protests? And was there another way for the Chinese leadership to act?
It was an Own Goal. China handed to its opponents an ever-present topic for attack. It was a bad moment in the history of China. It does have parallels with Hungary of 1956 and Prague of 1969. Those of us who generally take a positive attitude to China do need to answer the question What Went Wrong? More to follow in forthcoming weeks.
GRAHAM PERRY
