"China Controls Rare Metals for Defense Industry... West in Emergency"

US President Donald Trump [Yonhap News File Photo. Republication and DB prohibited]

China is blocking the supply of rare metals and minerals to Western defense companies, the Wall Street Journal (WSJ) reported on the 3rd (local time).

The WSJ reported that although rare earth exports from China resumed after the second trade agreement between the US and China in June, "China is maintaining control over rare metals and minerals (other than rare earths) for defense purposes."

Previously, China banned the export of dual-use minerals for civilian and military purposes, such as gallium, germanium, antimony, and graphite, to the US in December last year. The ban was on exporting these items to US military users or for military purposes. These rare metals and minerals do not fall under the 17 types of rare earths.

Amidst this, industry officials stated that the prices of specific rare metals and minerals required for the defense industry have risen more than fivefold compared to before China's recent restrictive measures.

One company revealed that it was offered samarium, a rare earth element necessary for manufacturing magnets capable of withstanding extreme temperatures in jet fighter engines, at 60 times the standard price.

Some companies warned that production cuts would be inevitable if there is no additional supply of rare metals.

Bill Lynn, CEO of Leonardo DRS, a US subsidiary of Italian defense company Leonardo, stated in a conference call on the 30th of last month that germanium had fallen to 'safety stock' levels (to prepare for unforeseen circumstances).

He said, "We need to see improved material supply in the second half of this year to maintain timely product delivery." The company uses germanium to make infrared sensors used in missiles and other equipment.

US-China Technology Competition [Yonhap News File Photo. Republication and DB prohibited]

Among various sectors, drone manufacturers are reported to be the most vulnerable.

Industry officials pointed out that most of these are small startups that have not been able to secure large inventories of rare earth magnets and rare metals.

A Western company that supplies Chinese rare earth magnets to civilian and defense companies stated that while most requests for civilian magnet imports have been approved recently, import requests for defense and aerospace sectors have been rejected or delayed.

In May, ePropelled, a US company that manufactures propulsion motors for drones, received Chinese government forms from its magnet supplier, which requested product drawings and photos, a list of buyers, and assurances that the products would not be used for military purposes.

The company, which has about 100 clients, including US defense companies and Ukrainian drone manufacturers, did not provide this information, and the Chinese supplier ceased magnet shipments.

"We discuss this issue daily, and our companies discuss this issue daily," said Dark Hardwick, vice president of international affairs at the Aerospace Industries Association.

According to Govini, a defense software company, it is estimated that over 80,000 components used in US Department of Defense weapon systems are currently produced with key minerals subject to China's export controls. Furthermore, it was identified that the majority of the supply chains for key rare metals and minerals used in US Department of Defense weapon systems rely on at least one Chinese supplier. Yonhap News