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China restricts supplies of critical minerals to Western defense firms

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Beijing: China is tightening restrictions on exports of critical minerals vital to Western defense industries, delaying production timelines and forcing companies to seek alternative sources, The Wall Street Journal reported, citing company sources.

One US drone manufacturer supplying the military reportedly had to postpone deliveries by up to two months after losing access to Chinese-made magnets derived from rare earth elements. The delay underscores the growing impact of China’s export curbs on defense-related production.

Traders told the Journal that prices for some materials essential to Western defense manufacturers have surged—by as much as fivefold—since the restrictions came into force. The bottlenecks are straining procurement efforts and driving up costs across the board.

According to the report, over 80,000 components used by the U.S. Department of Defense contain minerals now subject to Chinese export controls. Compounding the issue, nearly all U.S. military supply chains for these materials rely on at least one Chinese supplier, raising alarms over national security and production resilience.

In a further tightening of controls, Chinese authorities are reportedly asking Western buyers to disclose detailed end-use information for the minerals they purchase—an effort seen as preventing their use in military applications.

In April, China’s Ministry of Commerce added 16 US companies to its export control list to regulate the sale of dual-use goods—items with both civilian and military applications. According to The New York Times, Beijing simultaneously suspended exports of a broad array of critical minerals and magnets used in the manufacture of electric vehicles, drones, robots, and weapons systems.

In June, the Wall Street Journal reported, citing people familiar with the matter, that China had agreed to resume issuing rare earth export licenses to US automakers and industrial plants, but limited the permits to six months. Reuters also reported, citing people familiar with the matter, that China had not committed to granting export permits for some specialized rare earth magnets that US military suppliers need for fighter jets and missile systems.

Rare earth elements are a group of 17 metals that are widely used in high-tech devices, including computers, televisions, and smartphones, as well as in defense technologies, including missiles, lasers, transportation systems, and military communications.

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