China appears to be building up a new “leverage point” against foreign nations as it cracks down on rare earths hoarding.
Foreign companies purchasing rare earths from China are reportedly being warned against stockpiling them, according to the Financial Times, which cited two people familiar with the matter. China is reportedly threatening buyers with more supply restrictions.
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One person familiar with the matter told the Financial Times that China “is telling companies they cannot go out and build huge inventories in rare earths, or they will face shortages.”
The other person said, “this will be a leverage point from now on,” as Chinese authorities limit approved export volumes.
Rare earth metals from China are used in technologies including EVs, smartphones and even defense systems. While the term “rare earth metals” implies scarcity, many of the elements are common and mined throughout the world, but China has control over refining the materials, according to NPR.
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China is going beyond international restrictions and is also placing limits on its own entities by implementing mining and processing quotas. According to the Financial Times, last year, only two state-owned companies received quotas.
Experts testifying before the House Foreign Affairs Committee in July warned that China’s chokehold over critical minerals created a “life or death matter” for this century. According to California Republican Rep. Young Kim, China controls 92% of the globe’s processing of rare earth materials and “dominates the manufacturing of battery and magnet components.”
Former West Virginia Senator Joe Manchin, who is from the second-largest coal mining state in the country, said that it’s time for the U.S. to produce and rely on its allies — Japan and South Korea — to do the refining.
“We have the building blocks right there … to get in the game very quickly,” Manchin said.
Fox News Digital’s Caitlin McFall contributed to this report.
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