China is tightening its grip on its vast rare-earth minerals sector, and this could have implications for the U.S., which relies on China for elements that are used in the production of a range of goods, including military hardware.
The new restrictions imposed by China have been detailed in a policy document released in December by China’s Ministry of Industry and Information Technology. The policy document outlines a six-year plan that aims to reform and optimize the rare-earth industry, with a focus on illegal mining and smuggling, as well as promoting value-added industrial chain development of rare earths.
Rare-earth minerals are a group of 17 elements that are critical in the manufacture of a wide range of products, including electronics, renewable energy technology, and defense equipment. In the U.S., rare-earth minerals are used for making weapons, jets, submarines, smartphones, and electric cars.
China is the world’s biggest producer of these minerals, accounting for over 80% of global rare earths supply. The new policies could potentially heighten tensions between China and the U.S and could impact the global supply chain.
To mitigate the potential risk, some are urging the U.S. to invest more in domestic rare-earth mineral production or to diversify its supply chain to lessen dependence on China. However, these measures will likely take considerable time and investment to realize.
Nonetheless, China’s new restrictions underscore the strategic significance of the rare-earth industry and the importance of secure, sustainable, and diverse supply chains. The situation clearly indicates the
