China restricts supply of critical minerals to Western defense companies.
The US is seeking new partners, including Brazil.
247 - China is restricting the supply of critical minerals to Western defense companies, delaying production and forcing these companies to seek alternatives in other markets, the Wall Street Journal reported, citing sources at the affected companies.
According to the newspaper, for example, a drone manufacturer that supplies equipment to the United States military was forced to postpone orders for up to two months while searching for a replacement for Chinese magnets made with rare earth metals.
Traders told the newspaper that some materials needed by the Western defense industry are now being sold for prices five times higher—or even more—than those practiced before China imposed the restrictions.
The publication noted that more than 80 components used by the Pentagon contain minerals subject to export restrictions imposed by China. At the same time, almost all of the US Armed Forces' supply chains for these minerals depend, at least in part, on Chinese suppliers—which could create serious problems for the US military.
Furthermore, Western buyers reported to the newspaper that China has begun demanding detailed information about the intended use of the purchased minerals, in order to prevent their use by Western companies in arms production.
In early April, China's Ministry of Commerce announced it had placed 16 U.S. companies on an export watchlist to monitor shipments of dual-use (civilian and military) goods. As highlighted by the New York Times, Beijing suspended exports of a wide range of critical minerals and magnets, essential for the manufacture of automobiles, drones, robots, and missiles.
In June, the Wall Street Journal reported, citing sources close to the matter, that China had agreed to resume issuing export licenses for rare earth elements to US automakers and industries, but limiting the documents to a six-month period. Reuters also reported that, according to sources, China has not committed to granting export authorizations for certain specialized rare earth magnets needed by US military suppliers for fighter jets and missile systems.
Rare earth elements are a group of 17 metals widely used in high-tech devices such as computers, televisions, and smartphones, as well as in defense technologies, including missiles, lasers, transportation systems, and military communications. (With information from Sputnik).
