China announced the decision to impose sanctions against the American company Lockheed Martin. Although the details are not yet known, experts believe it is possibly a ban on the supply of rare earth elements.
The Chinese sanctions, announced on July 14, are a response to actions by Washington, which had previously approved the deal to supply Taiwan with equipment to upgrade the Patriot air defense missile systems produced by Lockheed Martin.
As part of the new sanctions against Lockheed Martin may be the cut of the supply of materials, including rare-earths products, which are crucial for the production of advanced weapons, and commercial restrictions to the suppliers of the company that do business in China, wrote the Chinese newspaper Global Times.
Chinese monopoly on rare earth production
The rare earth elements are a group of 17 metals that, due to their great importance for the production of all high-tech products “from smartphones to missiles” called “vitamins for modern life,” stresses the newspaper The Times.
Many of Lockheed Martin’s key products, including F-35 fighter jets and Patriot missiles, rely on components made of rare earth material, analysts estimate.
According to the British edition, China produces around 70% of the total volume of rare-earths material in the world in its own territory and processes around 95% of the rare earth minerals, thus being able to control the world supply.
In addition, Beijing has a network of rare earth mines in Africa that are “part of a long-term strategy to achieve world dominance in the field of this raw material in the future,” says The Times.
US consultancy Horizon Advisory quoted by The Times warned that China views its dominance of the rare earth market from a strategic rather than a financial perspective.
“The Chinese don’t care about the economic benefits,” said Horizon Advisory co-founder Nathan Picarsik. “They see control of this sector as a way to win without a fight,” he added.
Dependence of Western China Countries
For a long time, Western countries did not care where these resources come from, and only the worsening of the US-China trade war highlighted this problem.
The new Chinese sanctions once again demonstrated the vulnerability of western countries, he noted.
Last year, during the escalation of the trade war, China had already threatened to ban the supply of rare-earths materials. Then the Asian country ended up doubling export tariffs.
The Chinese threat spurred the US to revive development in this sector where the country was the main producer until the 1980s. Several mine and processor projects funded by the Pentagon were launched.
However, all projects are still ongoing. Only the inauguration of a new pilot plant that will process rare earth elements in Colorado can be highlighted.
The processing plant near the only US mine to mine rare-earths products in Mountain Pass, California, has not yet started operations.
The job is hampered by much higher labor costs compared to those of Chinese competitors, as well as stricter environmental standards, The Times says.
Meanwhile, for the third consecutive year, China increases quotas for the extraction of rare earth minerals in an effort to intensify its production.
The US government is considering imposing travel restrictions on members of the Communist Party of China (CPC), The New York Times (NYT) reported, citing sources familiar with the initiative.