China has severely curtailed its supply of critical minerals to the U.S. in recent months, showing the American defense-industrial base just how hooked it is on Beijing’s supply, according to The Wall Street Journal.
While the Pentagon has required that defense companies wean off rare earth magnets sourced with minerals from China by 2027, defense industry leaders have already felt the consequences of China curtailing its exports as manufacturers struggle to find alternative sources for defense-critical materials, The Wall Street Journal reported Monday. Some components have seen prices increase by a factor of 60, and others are so niche that no single supplier outside of China can be a feasible option for defense companies looking to use the minerals to manufacture products like computer chips for guidance systems, drone components and radars.
China produces around 60% of the world’s rare earth minerals while processing around 90% of the world’s supply, according to the International Energy Agency.
More than 80,000 components used in weapons systems have been affected by Chinese mineral export restrictions, according to a report from defense software firm Govini. Moreover, nearly all supply chains for critical minerals used by the Pentagon rely on at least one Chinese supplier.
Additionally, China dominates the lithium-ion battery market critical for all weapons systems, producing more than 80% of the world’s supply. China’s stranglehold on the critical markets presents a security challenge in itself, as Beijing has previously weaponized supply chain dominance against customer nations.
China has banned germanium, gallium and antimony exports to the U.S. since December 2024, affecting America’s access to critical inputs for night vision for soldiers, infrared sensors and ammunition, according to the WSJ. Defense companies have warned that these restrictions will likely result in production cuts in the future if not addressed soon.
“I can tell you…we talk about this daily and our companies talk about it daily,” Dak Hardwick, vice president of international affairs at the Aerospace Industries Association, told the WSJ.
Notably, drone manufacturers are particularly vulnerable, as China dominates the global markets for drones and related parts. Drone use has increasingly defined the modern battlefield, with the U.S. making a major push in July to incorporate other autonomous drones well beyond traditional plane designs such as the MQ-9 Reaper.
The Pentagon bought a majority stake in MP Minerals in July, which owns the only rare earth mineral mine in the U.S. While the Department of Defense plans to help the company increase its refining capabilities, the squeeze on the minerals is still hampering shorter-term growth.
The Chinese Embassy in the U.S. did not immediately respond to the Daily Caller News Foundation’s request for comment.
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