Earlier this year, we reported that Beijing is keeping an export ban on rare earths in its “back pocket”. Now it looks like the CCP is about to tighten state control over rare earth production so that it can more easily control who gets the metals.
While rare earth metals were previously mined by six large Chinese companies, the CCP is merging the assets of several state-owned companies to create China Rare Earth Group. The new mining giant will be based in resource-rich Jiangxi province; this should allow Beijing to have more leverage on the sourcing and by extension the price of these incredibly valuable products which are essential in the production of chips and other components used in high-tech products. , from computers to weapon systems.
China is believed to control up to 90% of the world’s supplies of rare earth metals. Only a small number of rare earth mines exist outside of China. As to where the rest is mined, the table below provides an overview.
Some say China’s control over the global rare earth market is waning, but the truth is, this is only slightly true.
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Washington has long been concerned that Beijing is using its control over rare earth supplies for “strategic purposes,” and the WSJ reports that this latest push to consolidate the industry comes at a time of “heightened sensitivity” to the West. . Beijing also raised environmental concerns, as the opening of new mines can irradiate entire neighborhoods.
The United States has taken steps to encourage increased production of rare earths in Australia, a staunch ally that has also recently angered Beijing. In February, the US Department of Defense signed a technology investment agreement with Australian firm Lynas Rare Earths, which the Pentagon has called “the largest rare earth element mining and processing company outside. from China “. Under the terms of the agreement, Lynas will establish a light rare earth processing plant in Texas. President Biden also issued an executive order naming rare earth minerals as one of four key areas requiring stronger policy options to reduce supply chain risk.
A 2019 visit to a rare earth refinery by President Xi was seen by many as a sign that rare earth miners had finally “arrived,” to use vague economic jargon.
Beijing has been timid about its plans. “China does not intend to use rare earths as a countermeasure against a country,” the state newspaper Global Times wrote earlier this year. However, he added that it remains an option when “foreign companies are harming the interests of China.”
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