China considering rare earth export controls to target US defense production: Report

據報導：中國為打擊美國國防工業擬限制稀土出口

US currently imports 80% of its rare earth elements directly from China


TAIPEI (Taiwan News) — China is considering the placement of export controls on rare earth elements in an effort to damage U.S. industry and in particular defense production, according to a report in the Financial Times.

Rare earth elements (REEs) are a group of 17 materials vital to the manufacture of various weapons systems, in addition to such items as magnets, electric vehicles, smartphones, and wind turbines. Based on U.S. Department of Energy statistics, the U.S. imports 80 percent of its REEs from China, with the remaining imports indirectly sourced from China.

In January, China’s Ministry of Industry and Information Technology proposed draft restrictions on the production and export of REEs. The proposed curbs come on the heels of a new law that came into effect in early December of last year related to China's export of strategic resources, though the items on the list have not been made public, wrote RFA.

"The government wants to know if the U.S. may have trouble making F-35 fighter jets if China imposes an export ban,” according to an anonymous Chinese government advisor quoted by the FT.

Rare earth industry executives have also been asked by Chinese government officials about the potential consequences of such restrictions for U.S. and European industry; in particular, Beijing has been curious about the timeline on which alternative mining and production capacity would be developed overseas, per the FT.

China first began to hint it might enact export controls on REEs in response to U.S. trade sanctions against Huawei in 2019. Since then, the issue of REEs has come to broader attention.

During its waning days, the Trump administration included over US$800 million for rare earth and strategic minerals research in a pandemic stimulus package. Under President Biden, the Pentagon awarded a US$30 million contract to Australian REE company Lynas to begin operations in Texas.

Currently, only one company in the U.S., MP Materials, is actively mining REEs, though upstart USA Rare Earth hopes to double that number by 2023. At one time, the U.S. was the world’s largest producer of the resource.