As China has tightened its grip on the global supply of rare earth metals and magnets through its recent export control regulations, the United States may be on the brink of a crisis, with the defense sector anticipated to suffer the most, according to a warning from an analyst based in London.
Earlier this month, China suspended the export of rare earth metals and magnets intended for military use. Additionally, it ceased the export of any equipment and human or technical resources that could assist any country in establishing its own production of rare earths.
Given these restrictions, a crisis is imminent, as stated by Neha Mukherjee, a Rare Earths Research Manager at Benchmark Mineral Intelligence in London.
“We are merely days, if not weeks, away from a crisis,” Mukherjee cautioned.
In an interview with ANI, Mukherjee explained that this predicament has emerged because the “entire world is now structurally dependent on China.” She emphasized that the only viable strategy for a nation to safeguard itself is to diversify its sources of rare earths as extensively as possible.
Rare earth elements consist of 17 metals that are not truly ‘rare.’ They are termed ‘rare’ due to the difficulty and expense associated with their extraction. These metals — along with the magnets produced from them — are integral to nearly every aspect of modern life, from essential household items like smartphones and refrigerators to automobiles and advanced military aircraft such as the F-35 and F-22, as well as sophisticated missiles.
China’s export restrictions represent a strategic maneuver, as they have the potential to disrupt the production of military equipment globally.
According to Yahoo Finance, China dominates approximately 70 percent of rare earth mining, 90 percent of refined rare earth production, and 93 percent of rare earth magnet manufacturing.
The defence sector is expected to experience the most significant impact.
Mukherjee indicated that although numerous sectors will face repercussions, the defence sector will suffer the most severely. In fact, this sector has been a key contributor to the implementation of these export restrictions.
“The export limitations are enforced because the Chinese do not wish to provide supplies to any defence manufacturing entities. Consequently, any company involved in the production of missiles, fighter jets, or related activities will be impacted. There will be a complete halt in supply. This situation is critical because 95 percent of these materials originate from China,” Mukherjee explained.
Rare earth elements are essential for nearly all contemporary military equipment, including fighter aircraft, missiles, radars, and sensors.
However, the consequences will reach far beyond the defence sector, as many other industries such as e-mobility, consumer electronics, and robotics will also be influenced, according to Mukherjee.
