For years, China has undercut other countries in the production and refining of defense-critical rare earth metals, dominating the global market.
At present China controls 85 percent of the global supply. The Chinese Communist Party (CCP) uses threats to cut off the supplies of rare earth minerals as a bargaining chip. It did this when the United States sold weapons to Taiwan, and once again when Japan captured a Chinese fishing boat captain, demanding the captain be returned before he was interrogated. China actually did cut off Japan’s supply in 2010, amid a dispute related to the Senkaku Islands.
As the United States attempts to build domestic supply chains of rare earth minerals, it has partnered with a Chinese company called Shenghe Resources, whose largest shareholder is a government entity. Even more concerning is that the U.S. Department of Defense is funding this partnership. This leaves China, once again, in control of global supply chains.
Rare earth metals, such as dysprosium and terbium, are vital for defense technology. They are also used in the manufacture of electric vehicles. Neodymium and praseodymium, two of the rarest minerals, are used in motors, turbines, and medical technology. Lanthanum is used in high-end camera lenses, with intelligence, surveillance, and reconnaissance applications. Phosphorescent europium is used in LED lights and plasma displays, as well as in the control rods of nuclear reactors.
Through the 1980s, the United States dominated the world market for rare earth metals. The tide shifted toward China, however, as pressure from environmentalists in the United States, combined with lower labor costs, drove production overseas.
The U.S. Department of Defense believes that China intentionally flooded the global market with cheap rare earth minerals, driving down the prices and forcing U.S. manufacturers out of the market.
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