What happened
US Ambassador David Perdue has stated that China is using its dominance in rare earths as a weapon against the world. China has increased its control over rare earths by introducing criminal penalties, asset seizures, and exit bans for those who try to diversify their supply chains away from China.
According to Perdue, China's actions are an escalation of its previous controls on exports, which now include restrictions on people and businesses seeking alternatives. China has also established a system that encourages individuals and organizations to report suspected violations involving strategic minerals, with rewards for verified reports.
The Chinese government has expanded its enforcement of strategic-mineral controls, including rules covering technology used in rare-earth mining, refining, metal production, magnet manufacturing, and recycling. Chinese citizens and organizations are barred from providing substantial assistance to overseas rare-earth mining, refining, and magnet-making operations without government permission.
Two US companies, MP Materials and USA Rare Earth, have been placed on an export-control list by China's Commerce Ministry, prohibiting exporters from supplying them with dual-use items. The Chinese government has taken these actions in response to the US government adding Chinese companies to its list of Chinese military companies.
