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China targets US Rare Earth firms as critical minerals rivalry intensifie. June 22, 2026 (Singapore, 22.06.2026)China has imposed export controls on two major US rare earth producers and eight other American companies, marking the latest escalation in the strategic competition between the world's two largest economies over critical minerals and advanced technology. The new restrictions, announced by China's Commerce Ministry on Monday, place MP Materials Corp. and USA Rare Earth Inc. on an export control list that limits their access to Chinese dual-use goods - products that can serve both civilian and military purposes. Beijing said the measures are intended to "safeguard national security and interests" and are a direct response to Washington's recent decision to add dozens of Chinese companies to a Pentagon blacklist over alleged military links. The latest move ends several months of relative calm following a summit between US President Donald Trump and Chinese President Xi Jinping in May, where both sides pledged to stabilize bilateral ties and reduce trade tensions. Retaliation over US blacklist. China's Commerce Ministry said the export controls were introduced in response to what it described as the US government's "egregious act" of expanding its so-called Chinese military enterprise list earlier this month. The Pentagon's updated blacklist added around 80 Chinese companies and subsidiaries, including technology giants Alibaba and Baidu as well as electric vehicle maker BYD, accusing them of supporting China's military development. Under the new rules, exporters are prohibited from supplying dual-use items to the listed US companies, and any ongoing export activities must stop immediately. The restrictions also extend beyond China's borders. Organizations and individuals worldwide are barred from transferring or providing Chinese-origin dual-use products to the sanctioned firms, effectively widening the reach of Beijing's export controls. Besides the two rare earth companies, the list includes aerospace, robotics and drone manufacturers such as Aveox and Oshkosh Defense. China's Finance Ministry separately announced that government procurement agencies would no longer purchase products made by 46 US defense-related firms, including Lockheed Martin, Raytheon, Boeing's defense division, General Dynamics units and Anduril Industries. Companies with US investments operating in China are exempted from the procurement ban. The inclusion of MP Materials and USA Rare Earth is particularly significant, as both companies are central to Washington's strategy of building an independent rare earth supply chain. MP Materials operates Mountain Pass in California, currently the only major rare earth mine in the United States, and received a US$400 million investment from the Department of Defense last year. USA Rare Earth recently secured US$1.6 billion in funding from the Department of Commerce and agreed to acquire Brazil's Serra Verde Group to expand its access to mineral resources. The two firms are among several American producers increasing capacity after supply disruptions during the US-China trade dispute in 2025. Earlier this month, rare earth refiner Phoenix Tailings also secured a conditional US$500 million Pentagon loan to build a new processing plant. Race to reduce dependence on China. Rare earths are a group of 17 metallic elements used in products ranging from smartphones and electric vehicles to wind turbines, fighter jets and guided missiles. Permanent magnets made from these materials are considered essential for both advanced manufacturing and defense industries. Although rare earths are relatively abundant, mining and refining them is expensive, technically complex and environmentally challenging, making alternative supply chains difficult to establish. China remains the dominant player across the industry. According to the International Energy Agency, it accounts for around 60% of global mined production used in permanent magnets, more than 90% of refining capacity and nearly 95% of permanent magnet manufacturing. Its control over the sector has increasingly become a geopolitical tool. Beijing previously tightened rare earth export controls during the latest US-China trade conflict, disrupting supply chains and forcing manufacturers in North America and Europe to temporarily halt production. The latest measures come just days after the Group of Seven (G7) agreed on a new strategy to reduce dependence on any single supplier of rare earths and permanent magnets. The bloc aims to ensure that no country accounts for more than 60% of its imports by 2030, with a longer-term goal of reducing that share to 50%. However, industry experts warn that building alternative supply chains will take years, requiring billions of dollars in investment, new mining projects and expanded refining capacity. As the United States and its allies accelerate efforts to diversify supplies while China reinforces its dominance over the sector, rare earths are rapidly becoming one of the most important strategic battlegrounds in global trade, technology and national security.

US DoW's OSC announces $500m loan for Phoenix Tailings. Shree Mishra The Office of Strategic Capital (OSC), part of the US Department of War (DoW), has disclosed a conditional commitment to provide a $500m loan to Phoenix Tailings. The loan is intended to help expand the company's rare earth element processing operations within the country. The OSC's funding, combined with further private investment, is expected to total around $1bn. This financing aims to significantly increase the production of critical metals at current sites and to establish a new rare earth separation and metallisation facility in the US, known as the Freedom Facility. Once operational, the planned facility will handle multiple types of raw materials to produce both light and heavy rare earth metals used in US industry, defence and allied supply networks. The project focuses on the midstream portion of the rare earth supply chain, which connects sources such as mines and recycling operations to manufacturers and end users. Midstream processing has been identified as a key bottleneck in the production of rare earths in the US, with most refining of these materials currently taking place overseas. The Freedom Facility intends to ease this constraint by offering extensive separation and metallisation capabilities to a range of suppliers and customers including recyclers, manufacturers and government bodies. It will process inputs such as concentrates, recycled feedstocks and secondary materials, aiming to enhance supply chain resilience and adaptability. Under-secretary of War for Research and Engineering Emil Michael said: "I applaud the Office of Strategic Capital on this important conditional investment, which advances the reshoring of rare earth supply chains and strengthens the might of America's defence industrial base. "The focused, unified effort and support from Secretary Hegseth and Deputy Secretary Feinberg have been crucial in addressing supply chain shortages and vulnerabilities in the defence industrial base." The facility is set to use technology and intellectual property developed and controlled within the US, with the goal of reducing dependence on foreign-controlled supply chains. Scheduled to begin operations in 2028, the site will rely on Phoenix Tailings' platform, which is based on proprietary chemistry, specialised industrial equipment and digital tools. As part of the agreement, Phoenix Tailings must complete additional financial, legal, technical and due diligence steps before the loan can proceed to final closing. The company presently runs metallisation sites in Burlington, Massachusetts, and Exeter, New Hampshire.

Pentagon loaning $500 million to rare earth element processing company for expansion. Tuesday, June 16th, 2026 The Defense Department's Office of Strategic Capital (OSC) on Tuesday said it has agreed to provide Phoenix Tailings a conditional $500 million loan for the processor of rare earth elements to expand existing capacity and construct a new facility as part of ongoing efforts to bolster the U.S. industrial base. Phoenix Tailings is also receiving another $500 million in private capital to assist with the expansion and construction. The Massachusetts-based company is currently conducting a nationwide search for the new... Not a subscriber or registered user yet? Please contact us at [email protected] or call us at 888-707-5814 (Monday - Thursday 9:00 a.m. - 5:30 p.m. and Friday 9:00 a.m. - 3:00 p.m. ET.), to start a free trial, get pricing information, order a reprint, or post an article link on your website.