⚠️China is tightening its grip on rare earths as a geopolitical weapon:

China has placed MP Materials and USA Rare Earth, the two leading US rare earth producers, on its export control list, prohibiting them from accessing Chinese-origin dual-use materials and equipment, according to Bloomberg.

Both companies say they have already largely cut off supplies of equipment and materials from China.

The move is a direct response to the Pentagon's decision to add major Chinese companies to its list of firms accused of supporting the Chinese military.

MP Materials operates the only major rare earth mine in the US and received a $400 million equity investment from the Department of Defense last year, while USA Rare Earth recently secured $1.6 billion in funding from the Department of Commerce.

This comes days after G7 nations agreed to cap imports of rare earths and permanent magnets from any single country outside the bloc at below 60% by 2030, in an effort to reduce dependence on China.

China accounts for ~60% of global mined production of magnet rare earths and over ~90% of global refining capacity, giving Beijing near-total control over a supply chain critical to everything from iPhones and EVs to fighter jets and missiles.

Beijing is using its rare earth dominance as a strategic lever, while the US remains years away from building a credible alternative.