China has placed two American rare earth producers – MP Materials and USA Rare Earth – on its latest export control list, effectively restricting their access to Chinese processing capacity. The move marks an escalation in Beijing’s efforts to block U.S. efforts to build an independent supply chain for minerals critical to defense and advanced technology.
The official justification from Beijing is that the two companies may use rare earth elements to produce goods and technologies with dual-use applications. While the ban on exports to these firms might seem paradoxical – since they are themselves producers of rare earths – the real target is not mining but processing. For years, the United States and Europe neglected investment in rare earth extraction and refining technologies due to high costs and environmental concerns. China seized the opportunity and now controls over 90 percent of global supply for some key elements.
Being placed on the list means Chinese companies cannot ship rare earths to MP Materials or USA Rare Earth without special permission. In practice, if the American firms sought to process their own ore in China, they could lose the material entirely. This is a significant departure from China’s earlier tactics, which relied on flooding the market to crush nascent competitors financially.
A new strategy to block processing
In the past, whenever Western companies announced rare earth mining or processing projects, Beijing would respond by increasing supply and driving down prices. This made many projects financially unviable and forced investors to walk away. Now, China has shifted to direct supply restrictions. – The goal is to prevent American companies from even accessing the processing stage, which is where the real value and strategic leverage lie – the article notes.
The two companies targeted are central to Washington’s push to break China’s near-monopoly. MP Materials operates the Mountain Pass mine in California – the largest rare earth mine outside China – and counts the Pentagon among its shareholders. Over the past year, it has significantly increased its processing capacity, making it a key piece of the U.S. strategy to reduce dependence on Chinese supply chains.
Pentagon-backed MP Materials in the crosshairs
MP Materials is particularly worrying for Beijing because it is the most advanced American effort to create a fully integrated rare earth supply chain – from mining to processing to magnet production. The company has been working to restart and expand processing operations at Mountain Pass, which was once the world’s leading rare earth source but was largely idled after China undercut global prices.
The United States relied on China for 70 percent of its rare earth imports between 2020 and 2023. Rare earth elements – a group of 17 metals with unique chemical and physical properties – are essential for everything from F-35 fighter jets and missile guidance systems to electric vehicle motors and wind turbines. Although not actually rare in the Earth’s crust, extracting and refining them is technically challenging, energy-intensive, and environmentally costly.
China’s latest action signals that the battle for control over these critical materials is entering a new, more aggressive phase. Direct export controls replace the earlier strategy of market manipulation, and the Pentagon’s involvement in MP Materials makes the company a prime target. For the U.S. and its allies, finding alternative processing routes – perhaps in Australia, Canada, or Europe – has become an urgent priority.
Źródło: WNP.PL, Fot. IM Imagery / Shutterstock
