China currently accounts for 70% of global production of rare earths, controlling 90% of the $4-billion global market.
“The government wants to know if the US may have trouble making F-35 fighter jets if China imposes an export ban,” the FT said, quoting a Chinese government adviser.
The specter of export curbs arose in 2019 amid a deepening trade war, when Beijing prepared a plan to restrict shipments as a way to target Washington. While those restrictions never eventuated, it pushed the American government to seek out ways to cut their reliance on a single source of supply.
Donald Trump last year signed an executive order aimed at expanding domestic output of rare-earth minerals, a year after the Department of Defense was ordered to spur the production of magnets. The US also awarded Lynas Rare Earths, the biggest producer outside China, a contract to boost processing capabilities.
The facility, expected to produce about 5,000 tonnes of rare earths a year, would help Washington’s push to secure domestic supply of essential minerals used in magnets and motors that power phones, wind turbines, electric vehicles and military devices.
President Joe Biden, in his first conversation as president with Chinese leader Xi Jinping, spoke of his concern about Beijing’s “coercive and unfair economic practices” as well as human rights abuses in the Xinjiang region.
Despite their name, the 17 minerals grouped under the rare earths label are not rare. According to the US Geological Survey (USGS), they are roughly as common as copper. But, because rare earth ores oxidize quickly, extracting them is both difficult and extremely polluting.
(With files from Reuters and Bloomberg)