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China Threatens To Hobble US Defense Industry By Limiting Export Of Rare-Earth Metals
Nation and State ^ | 02/16/2021 | Tyler Durden

Posted on 02/16/2021 8:42:20 AM PST by SeekAndFind

China has been quietly exploring the economic damage it could inflict to US and European companies - including defense contractors - if they were to impose export 'restrictions' on 17 rare-earth materials, according to a report in the Financial Times.

Notably, the US government relies on these rare earths for the manufacture of F-35 jets and other sophisticated weaponry, which use them for critical components such as electrical power systems and magnets.

"The government wants to know if the US may have trouble making F-35 fighter jets if China imposes an export ban," said one Chinese government adviser who spoke on condition of anonymity.

One rare earth metal for example, samarium cobalt, is used in precision guided missiles and fighter jets, and advanced communications systems.

FT added that "[t]he Ministry of Industry and Information Technology last month proposed draft controls on the production and export of 17 rare earth minerals in China, which controls about 80% of global supply."

Before being voted out of office, President Trump and his administration sought to take steps that might help the US limit China's resource dominance in this area, including signing an executive order declaring a "national emergency" in the US mining and minerals industry (much of which remains focused on digging coal out of the ground). China has been widely acknowledged as dominant in the rare-earth minerals market for decades.

But with Trump out, and a much more China-friendly administration back in power in Washington, it looks like Beijing is already considering playing hardball to get what it wants.

Industry executives said government officials had asked them how badly companies in the US and Europe, including defence contractors, would be affected if China restricted rare earth exports during a bilateral dispute.

...

Fighter jets such as the F-35, a Lockheed Martin aircraft, rely heavily on rare earths for critical components such as electrical power systems and magnets. A Congressional Research Service report said that each F-35 required 417kg of rare-earth materials.

As one state-affiliated security analyst explained to the FT, China has been mulling potential export controls for a while, and would seek to target minerals that are critical to the US defense industry first.

In a November report, Zhang Rui, an analyst at Antaike, a government-backed consultancy in Beijing, said that US weapons makers could be among the first companies targeted by any export restriction. China’s foreign ministry said last year it would sanction Lockheed Martin, Boeing and Raytheon for selling arms to Taiwan, the self-ruled island that Beijing claims as its sovereign territory. The proposed guidelines would require rare earth producers to follow export control laws that regulate shipments of materials that “help safeguard state security”. China’s State Council and Central Military Commission will have the final say on whether the list should include rare earths.

Despite their classification, rare earth metals aren't actually that rare.And fortunately for the US, the mining of rare-earth metals has been growing outside of China.

The decision to once again "consider" cutting the US off from critical stocks of rare earth minerals couldn't come at a more precarious time, as the worsening energy crisis in Texas, compounded by so-called "extreme weather" which has forced blackouts to more than 5MM utility customers in the state, may play into a new "commodity supercycle" currently being discussed inside the walls of America's investment banks - including by JPMorgan's Marko Kolanovic.

We now wait to see how the Biden Administration, and the markets, will respond to this latest threat from Beijing.


TOPICS: Business/Economy; Culture/Society; Foreign Affairs; News/Current Events
KEYWORDS: china; defense; export; rareearth
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1 posted on 02/16/2021 8:42:20 AM PST by SeekAndFind
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To: SeekAndFind

Time for us to strip mine the mountains in Afghanistan.


2 posted on 02/16/2021 8:43:05 AM PST by EEGator
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To: SeekAndFind

What? Again?


3 posted on 02/16/2021 8:43:14 AM PST by null and void (We, MSM, decide what news you can see, and what you can not see, don't you dare call us Not-Sees)
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To: SeekAndFind

Obviously gropey joe is OK with that because he’s letting the chicoms do whatever they want to the country he hates.


4 posted on 02/16/2021 8:43:49 AM PST by I want the USA back (The nation is in the grips of hysterical insanity, as usual.)
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To: EEGator

Agent Orange allah the poppy fields and pay the Afghanis to mine their own damned mountains!


5 posted on 02/16/2021 8:45:58 AM PST by null and void (We, MSM, decide what news you can see, and what you can not see, don't you dare call us Not-Sees)
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To: SeekAndFind

Yeah, it’s not like geology somehow decided to deposit every rare-earth mineral in China. Stop the EPA madness and start mining here.


6 posted on 02/16/2021 8:46:15 AM PST by AnotherUnixGeek
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To: SeekAndFind
Sounds like another business opportunity for the Bidens.
7 posted on 02/16/2021 8:48:55 AM PST by Kid Shelleen (Beat your plowshares into swords. Let the weak say I am strong)
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To: AnotherUnixGeek

I believe they’re mining a lot in Africa.


8 posted on 02/16/2021 8:49:23 AM PST by EEGator
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To: SeekAndFind

China no longer accounts for all of the global REE supply due to increased production in the rest of the world. There are only four REE-specific mines that exist outside of China, two of which opened in the past year (other mines worldwide only produce REEs as a byproduct). These other mines are Mountain Pass in the United States, Mount Weld in Australia, Lovozero in Russia, and Kerala in India. However, these mines are not the only locations of REE deposits.

https://web.mit.edu/12.000/www/m2016/finalwebsite/solutions/deposits.html


9 posted on 02/16/2021 8:49:47 AM PST by READINABLUESTATE (CENSORSHIP = VIOLENCE)
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To: SeekAndFind

We can go to India and South Africa. F China!


10 posted on 02/16/2021 8:49:58 AM PST by DarthVader (Not by speeches & majority decisions will the great issues th the day be decided but by Blood & Iron)
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To: null and void

Afghanistan is a non cohesive tribal shithole.

We mine there, and we take almost all profits.
I’m completely fine with destroying their poppy fields.
They exist because we let them.


11 posted on 02/16/2021 8:51:15 AM PST by EEGator
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To: SeekAndFind

Rare earths, most of which aren’t all that rare, are a Chinese monopoly for economic and regulatory reasons, not technical ones. The Chinese can restrict the supply only in the short term. In the medium- to long-term, an embargo like that will only hurt them.


12 posted on 02/16/2021 8:51:29 AM PST by Campion (What part of "shall not be infringed" don't they understand?)
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To: SeekAndFind

Xiden will use environmental regulations, as did Clinton, to force the closure of the remaining rare earths mines in the US.


13 posted on 02/16/2021 8:52:12 AM PST by PIF (They came for me and mine ... now its your turn)
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To: SeekAndFind
China Threatens To Hobble US Defense Industry By Limiting Export Of Rare-Earth Metals


14 posted on 02/16/2021 8:53:04 AM PST by Navy Patriot (Celebrate Decivilization)
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To: SeekAndFind

20 years in Afghanistan and we never figured out how to secure access to their rare earth minerals....


15 posted on 02/16/2021 8:55:12 AM PST by G Larry (Authority is vested in those to whom it applies.)
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To: SeekAndFind

We have more than enough rare earth minerals and other resources.
Our problem is getting the tree huggers and protectors of endangered snails out of the way.


16 posted on 02/16/2021 8:55:19 AM PST by BuffaloJack (Neither safety nor security exists in nature. Everything is dangerous and has risk.)
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To: SeekAndFind

10% for the big guy!


17 posted on 02/16/2021 8:55:54 AM PST by KC_Lion
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To: AnotherUnixGeek

“Yeah, it’s not like geology somehow decided to deposit every rare-earth mineral in China. Stop the EPA madness and start mining here.”

Absolutely. The US has these minerals and Washington DC has stopped businesses from providing the materials we need.


18 posted on 02/16/2021 8:56:27 AM PST by jdsteel ("A Republic, Madam, if you can keep it." Sorry Ben, looks like we blew it.)
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To: SeekAndFind

That’s weird graph, or maybe I need more coffee


19 posted on 02/16/2021 9:00:41 AM PST by nuconvert ( Warning: Accused of being a radical militarist. Approach with caution.)
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To: SeekAndFind

I remember President Trump did an EO to restart our one REE mining refining processor.


20 posted on 02/16/2021 9:00:52 AM PST by BiglyCommentary
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