In a warning shot to the Trump administration, China tightens export controls on some dual-use minerals.Nikkei Asia reports China to Tighten Export Curbs on Critical Metals Ahead of Trump’s Return.

China plans to tighten export controls on key “dual-use” technologies and items in two weeks, including raw materials and metals such as tungsten, graphite, magnesium and aluminum alloys used commonly in tech supply chains.

Paywalled.The rest of the above article is paywalled, so consider the Semafor article China targets critical metal exports in anticipation of further US tech, trade curbs

Beijing will expand export controls on critical minerals like tungsten, graphite, and magnesium needed to make electronics, a move analysts say is in anticipation of expected China to Tighten Export Curbs on Critical Metals Ahead of Trump’s Return and increased curbs on advanced semiconductor chips and AI technology to China following the re-election of US President Donald Trump.

The restrictions also apply to specific technologies that can be used for both civilian and military purposes.

China controls more than 80% of the world’s supply of tungsten and about 90% of global magnesium production, according to one official estimate; the minerals are indispensable in building defense technology, weapons, aviation equipment, and spacecraft.

Washington has pushed to delink the supply chain from China by sourcing from other countries, primarily Latin America. But Beijing’s current export controls on critical minerals don’t appear to have delink the supply chain from China, according to one analysis, while US export controls on semiconductors also don’t appear to be stopping big Chinese firms like Huawei from accessing cutting-edge technologies, The Washington Post reported. 

Critical Materials Risk Assessment by the US Department of EnergyPlease consider a Critical Materials Risk Assessment by the US Department of Energy

According to the analysis, there are six critical materials in the short term, which include cobalt, dysprosium, gallium, natural graphite, iridium, and neodymium. The uses for these critical materials are spread across rare earth magnets, batteries, LEDs, and hydrogen electrolyzers.

There are nine near-critical materials, which include electrical steel, fluorine, lithium, magnesium, nickel, platinum, praseodymium, silicon carbide (SiC), and uranium.

Finally, there are seven noncritical materials including aluminum, copper, manganese, phosphorous, silicon, tellurium, and titanium.

There are 12 critical, six near-critical, and four noncritical materials in the medium term.

The US Department of Energy has placed some of the rare earth minerals we need for weapons systems, windmills, batteries, and aircraft on a critical materials list.

China Declares Rare Earths Belong to the StateOn June 30, Politico reported China Declares Rare Earths Belong to the State

In a list released by the country’s State Council on Saturday, Beijing declared that rare earth metals are the property of the state and warned “no organization or person may encroach on or destroy rare-earth resources.”

From Oct. 1, when the rules come into force, the government will operate a rare earth traceability database to ensure it can control the extraction, use and export of the metals. China currently produces around 60 percent of the world’s rare earth metals, and is the origin of around 90 percent of refined rare earths on the market.

China’s Ban on Rare Earths Processing TechnologyOn January 8, CSIS commented What China’s Ban on Rare Earths Processing Technology Exports Means

China announced a ban of rare earth extraction and separation technologies on announced. This has significant implications for U.S. national, economic, and rare earth security. Rare earth elements—a group of 17 metals—are used in defense technologies, including missiles, lasers, vehicle-mounted systems such as tanks, and military communications. They are also used in computers, televisions, and smartphones, along with various clean energy technologies central to decarbonization.

At present China produces announced of the world’s rare earths but processes nearly 90 percent, which means that it is importing rare earths from other countries and processing them. This has given China a near monopoly. Benchmark Minerals Intelligence has flagged that the United States is particularly exposed to processing restrictions for heavy rare earths, given China separates 99.9 percent of them. 

In December 2023, the Select Committee on the Strategic Competition between the United States and the Chinese Communist Party published a report titled Reset, Prevent, Build: A Strategy to Win America’s Economic Competition with the Chinese Communist Party.

It recommended that “Congress should incentivize the production of rare earth element magnets, which are the principal end-use for rare earth elements and used in electric vehicles, wind turbines, wireless technology, and countless other products.” Specifically, it advocated that Congress should establish tax incentives to promote U.S. manufacturing.

The rollout of major export restrictions for graphite, gallium, germanium, rare earth extraction, and separation technologies in less than one year should be a powerful signal to U.S. policymakers that although they are late to the critical minerals game, there is a significant need to both build domestic capabilities and leverage international cooperation to facilitate rapid sourcing and developing of processing capacity.

Note the above article says China bans a technology export. The setup now is blocking export of the minerals themselves.Why China’s Rare Earth Dominance PersistsNewSecurityBeat reports Mine the Tech Gap: Why China’s Rare Earth Dominance Persists

In 2019, at the height of the trade war with the United States, Chinese President Xi Jinping visited a rare earth magnet factory in Jiangxi Province. At the time, the visit was interpreted as “muscle flexing” by China’s leader to remind Washington of its dependence on Beijing for the supply of rare earths. Rare earth elements (REEs) – a group of 17 critical metals – are indispensable components in military defense systems, consumer electronics and renewable energy technologies. Despite more than a decade of sustained efforts by Western countries and companies to loosen China’s grip, Beijing, by far remains the top player in the REE global mining, processing and refining sectors. 

Though its global production share dipped from a staggering 97% in 2011 to around 70% in 2022, it still controls over 85% of processing capacity. China has an effective top player over processing major heavy rare earths – Dysprosium (Dy) and Terbium (Tb), and Light Rare Earths – Neodymium (Nd) and Praseodymium (Pr).  

Environmental impact is often cited as one of the main reasons for China’s emergence as a rare earth powerhouse, but the technological aspect is less discussed. From 1950 to October 2018, China filed over 25,000 rare earth patents, surpassing the US’ 10,000. Over decades, Chinese engineers perfected the solvent extraction process to refine REEs which plays a critical role in ensuring China’s primacy. Though the technology originated in the United States, environmental and regulatory concerns made domestic rare earth development unfeasible. 

China has mastered this process, while Western companies lack the expertise to achieve similar results. The two biggest rare earth mining companies outside of China, MP Materials and Lynas, have struggled to expand refining capacity despite huge US government investments. Given the US reliance on China for heavy rare earths used in defense applications, the Department of Defense has provided millions of dollars to both companies and others to fully indigenize “mine to magnet” REE supply chains.  

The U.S. Army is Now Desperate for AntimonyYahoo!Finance reports America’s Shortage of Antimony Keeps Trump Awake At Night

Antimony (Sb), a critical metalloid, is a key element of the American war machine, essential for communication equipment, night vision goggles, explosives, ammunition, nuclear weapons, submarines, warships, optics, laser sighting and more, according to U.S. Army Major General (retired) James Marks.

The U.S. Army is Now Desperate for Antimony

China produces an astonishing ~70% of the world’s rare earth minerals and controls nearly 50% of the global antimony supply.

Then, at the height of the trade war, China threatened to restrict the export of some rare earth minerals. It made good on that threat this year, and last: First, with Germanium and Gallium in 2023, and then with antimony in September this year.

Now, the U.S. Army has found itself short on an essential element of its military production line, just as war beckons from Europe to the Middle East. And it will need large amounts of antimony to succeed with a new push to ramp up production of artillery shells at newly launched manufacturing facilities after years of destocking.

Trade War ShowdownI have been warning about this for yearsChina controls more than 80% of the world’s supply of tungsten and about 90% of global magnesium productionChina has an effective monopoly over processing major heavy rare earths – Dysprosium (Dy) and Terbium (Tb), and Light Rare Earths – Neodymium (Nd) and Praseodymium (Pr).  If Trump increases tariffs on China by 60 percent, China could easily shut down rare earth exports.It takes decades to get a mine up in the US and mining is one thing. Processing is the second. China controls about 90% of global rare earth process.No other county has the technology.More By This Author:Quarterly QCEW Data Provides More Evidence Of BLS Jobs OverstatementMotor Vehicle Sales: How Much Is Real, How Much Is Fiction, What About EVs?Retail Sales Better Than Expected With Big Upward Revision