China targets US rare earth miners as Pentagon faces restocking rush

China put two US rare earth miners on its export control list, along with eight technology companies, in response to the US Department of Defence blacklisting Chinese businesses for their alleged ties to the People’s Liberation Army.MP Materials and USA Rare Earth will both be banned from buying Chinese exports with dual civilian and military uses, the Ministry of Commerce said on Monday. Motor maker Aveox and drone companies Red Cat and Teal Drones were among the other companies included in the order.The restrictions were imposed to “safeguard national security” and in response to “malicious actions” by the US government, the Commerce Ministry said. The Pentagon banned a number of Chinese companies, including electric-vehicle maker BYD, from bidding for US military procurement contracts earlier this month.China also curtailed 46 US defence and aerospace companies’ ability to bid for government contracts as it imposed the first new measures against US businesses since the signing of a trade-war truce in October. The tit-for-tat announcements reflect ongoing bilateral tensions even after the countries’ presidents agreed to forge a “constructive relationship of strategic stability” at a summit in Beijing last month.The two blacklisted miners are at the forefront of US attempts to ease China’s stranglehold on global supplies of rare earth minerals, which are used across modern technologies. Both businesses have received US government funding to help develop rare earth mines in the United States.The 46 companies covered by the government-contract restrictions include units of General Dynamics, Lockheed Martin and RTX’s Raytheon. Chinese ventures of the 46 businesses can still bid for contracts.Related news: In May, China ended a four-month halt in exports of gallium, a rare earth, that was imposed amid a bilateral dispute over Taiwan. Shipments of germanium, another rare earth, remain on hold. Both metals are used in making semiconductors. China’s total exports of rare earth magnets surged almost fourfold in May from a year earlier, with about 40 per cent heading to the European Union. The country slashed rare earth exports in May 2025 as part of a trade war with the US. said he will return to China “at some point” this year “for a big conference” as he unveiled a new presidential plane on Friday. The comments were probably a reference to the November Apec summit in Shenzhen, and his attendance would mark the first visit by a US president to the city, China’s technological powerhouse. Trump and China’s President Xi Jinping may meet face-to-face four times this year. The two had a summit in Beijing last month, and Xi will probably pay a state visit to the US in September and attend a G20 meeting in Florida in December. China signalled that it’s ready to work with Colombia’s probable new president, Abelardo de la Espriella, a far-right lawyer who won Trump’s endorsement and has promised to pull the South American country back towards the United States. Beijing views the relationship between the two countries “from a strategic height and long-term perspective”, a foreign ministry spokesman said on Monday. Colombia joins South American nations including Argentina, Bolivia and Chile in picking a rightist leader, complicating China’s efforts to build ties in a resource-rich area of the world. How others reported it China playbook: “We can interpret this as a tit-for-tat response, and that fits into China’s playbook any time we’ve seen escalation from the US side in terms of trade and investment tools,” said Nick Marro, global trade lead analyst at the Economist Intelligence Unit. … [Still,] Beijing’s orders in practice may be hard to enforce and many of the companies named in those orders have already moved their supply chains out of China or begun to “de-risk” their operations there [said supply chain consultant Cameron Johnson]. (Al Jazeera) Exposed supply chains: Despite the US’ push to accelerate mine-to-magnet capacity, the latest Chinese export controls underscore how exposed the US is as it focuses on building domestic critical minerals supply chains. … The resulting impacts will likely include slower downstream processing, magnet manufacturing, separation, and other related activities. (Mining.com.au) Limited impact: Beijing’s decision to impose export controls and procurement restrictions on a group of US companies – including two rare earth manufacturers – likely carries limited direct economic costs. Still, the move sends a clear signal that China plans to respond assertively to any US actions it sees as targeting its economy or undermining its own technological advances in industries from advanced materials to drone manufacturing. (Bloomberg Economics) Trade-war leverage: China’s actions on Monday “likely serve to build leverage for China in the ongoing negotiations with the US,” said Henry Gao, a trade expert and professor of law at Singapore Management University. “In terms of the trade truce, this development introduces additional friction, but it does not necessarily derail the process.” (The Wall Street Journal) No escalation: Hu Xinyue, a senior analyst at the S. Rajaratnam School of International Studies in Singapore, agreed that the new export controls are a calibrated response to push back against US pressure, rather than an escalation. Noting that Nvidia and other major chipmakers were spared, Hu said China this time chose targets that would cause some hurt without touching the most sensitive nerves in the US-China relationship. (The Straits Times) The SCMP Plus takeawayChina’s targeting of rare earth miners highlights the US struggle to develop domestic supplies of critical minerals – a challenge that the four-month Iran conflict has only heightened.President Donald Trump will host defence contractors at the White House on Wednesday as he seeks to quickly rebuild military stockpiles depleted in the Middle East. Top of the list is Patriot missiles, used to defend against incoming attacks.“We have quite a few of them, but we want to make sure we have always a lot of them,” Trump told reporters on Monday at the White House. The US used about half of its 2,000-plus stockpile of Patriots during the Iran war, according to the Centre for Strategic and International Studies. It also supplies missiles to allies, including Ukraine.Getting rare earths and other critical minerals is essential for rebuilding these stockpiles. Patriot systems use rare earths to track incoming hypersonic threats and ballistic missiles. Their guidance depends on control fin motors that use high-powered permanent magnets made of neodymium (NdFeB magnets) and praseodymium. These are often mixed with heavy rare earths dysprosium and terbium, which keep magnetic charges at extreme temperatures.Heat- and corrosion-resistant tantalum, another critical mineral, is used to make high-performance capacitors for missiles’ navigation and guidance systems. Tungsten, with the highest melting point of any metal, is used in the interceptor’s blast-fragmentation warheads, which shred incoming ballistic and cruise missiles and drones.In total, there may be several kilograms of rare earth magnets inside a single precision-guided missile, according to Rare Earths Exchanges. A production surge of 1,000 cruise missiles per year could require several tonnes of rare earth magnets and potentially tens of kilograms of dysprosium or terbium, it said.The problem for the US is that it imported more than 95 per cent of its rare earths between 2019 and 2022, according to a report on Department of Defence supply chains by the US Government Accountability Office. Tantalum hasn’t been commercially produced in the country for decades. The last tungsten mine closed in 2015, driven out of business by cheap imports.Instead, the US is reliant on China, which produces 69 per cent of the world’s rare earths and 83 per cent of its tungsten. The Asian nation also processes imported tantalum for export.That reliance is a risk, particularly when China has shown a willingness to use its rare earths stranglehold as leverage in trade wars. For instance, in April 2025, it placed export controls on terbium and dysprosium, two key raw materials needed to make a Patriot missile.The US has taken steps to boost anaemic domestic supplies of rare earths, including agreeing investments in both of the miners included in the new Chinese export controls. MP Materials operates the sole US rare earth mine at Mountain Pass in California. USA Rare Earth is developing a project in Texas.Rare earths are also one of the few areas where the Trump administration has developed new forms of international cooperation. The G7 last week set a goal of paring reliance on Chinese rare earths to less than 60 per cent by 2030. The US has also signed minerals deals with friendly nations like Australia.Still, it took China decades to build up its position in rare earths and it will be a long time before the US and allies can hope to create alternative supply chains. That’s even with potential new impetus from the post-war rush to ramp up production of Patriot missiles.