China's secret strategy: rare earths pose a dangerous threat to the US economy!

China's secret strategy: rare earths pose a dangerous threat to the US economy!

China has become the dominant force in rare earths, putting the US and EU in a critical position. In a recent report by Wall Street Online It is highlighted that the Asian state is using price controls for these strategically important raw materials as a tool in the trade war. Observers warn of possible supply bottlenecks that could be further exacerbated by China's actions.

The sole U.S. rare earth miner, MP Materials, operates the Mountain Pass mine and is increasingly confronted with problems arising from China's monopoly control. Company CEO Jim Litinsky commented on the misleading stability of the existing system and described the situation as irreparably damaged. The “Humpty Dumpty scenario” he describes suggests that a return to the previous order is hardly possible.

Dependence on China

The US is heavily dependent on China and imports 80% of its rare earth needs. This represents a major challenge, especially given the increasing demand driven by the expansion of climate technologies and the rise of electric cars and wind turbines. According to that Institute for Rare Earths These raw materials are crucial to the national security of both the US and the EU.

China has also imposed export restrictions on gallium and germanium in response to Western measures on semiconductor technologies. Companies like Lynas Rare Earths plan to build separation facilities in Texas, supported by U.S. investments. These measures are part of a broader strategy to reduce dependence on China.

Further developments in the raw materials sector

The Pentagon has invested over $100 million in raw materials policy to ensure security of supply for military applications. Significant rare earth deposits have been discovered in Sweden by LKAB, which plans to collaborate with REEtec. In addition, Schaeffler has signed a supply agreement with REEtec to establish an independent value chain.

Nevertheless, the environmental impact of rare earth mining remains a key problem in China. Mining is characterized by poor environmental standards and is often not carried out transparently. In Myanmar, the dismantling is controlled by militia groups that cooperate with Chinese companies. All of these factors contribute to China's continued dominance in the global market, where it remains the main source of rare earth oxides and permanent magnet production.