China is tightening its grip on the supply of critical minerals needed by Western defense companies, prompting production delays and forcing manufacturers to scramble for alternative sources. As US-China trade tensions have escalated, Beijing has imposed stricter controls on exports of rare earths and other minerals vital for making military hardware like bullets, drones, night-vision goggles, and jet fighters, the Wall Street Journal reports. This has left American manufacturers, which rely on China for roughly 90% of the world's rare earths, searching globally for stockpiles and often paying sharply higher prices.
Some materials, such as samarium used in high-temperature magnets for jet engines, have seen prices soar as much as sixtyfold. Companies warn that continued shortages could mean production cuts, with executives at defense suppliers like Leonardo DRS reporting they are down to their "safety stock" of germanium, used in infrared sensors. "In order to sustain timely product deliveries, material flow must improve in the second half" of the year, the company's CEO said on a conference call, per the Journal.
The Pentagon told CNBC last month that it's taking steps to boost US production of the minerals, including buying a direct equity stake in the mining company MP Materials. And Apple has reached a deal with the company. The Defense Department has told contractors to wean themselves off China-sourced magnets by 2027. China's new export controls now require buyers to provide detailed documentation on how minerals will be used, particularly for defense applications. Western firms report that requests for magnets for civilian use get approved, while those intended for defense are rejected or delayed.
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