American Tungsten Corp. (TSXV: TUNG, OTCQB: DEMRF)
Building America’s Defense Critical Metals Supply
In a significant move impacting global high-tech supply chains, China has expanded its export controls on rare earth elements, tightening its grip on these critical materials just days before a scheduled meeting between the Chinese and US heads of state.
The new regulations, announced last Thursday, impose export licensing requirements on five additional rare earth elements, bringing the total number of controlled elements to twelve. More notably, the controls extend upstream for the first time, restricting the export of specific technologies and equipment used in rare earth mining and refining – areas where China holds a dominant position.
The announcement immediately raised concerns over potential supply disruptions for these materials, often dubbed “industrial vitamins” due to their essential role in a wide range of technologies, from smartphones and electric vehicles (EVs) to advanced defense systems. A previous round of controls in April had already triggered shortages of rare earth magnets, temporarily halting production at several global automakers.
Chinese authorities have stated they will “facilitate” the licensing process to alleviate market anxieties but will explicitly deny applications related to defense and strictly review those involving advanced semiconductors and certain artificial intelligence technologies.
The move underscores China’s near-monopoly in the processing of these strategic minerals. According to the International Energy Agency, China accounts for 61% of global rare earth mining and commands a staggering 92% share of global rare earth processing capacity. The challenge is particularly acute for heavy rare earths, which are scarcer and for which the US currently lacks domestic separation capability.
Until the beginning of this year, heavy rare earths mined in California were still being shipped to China for separation, noted Gracelin Baskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies.
In response to the perceived supply risk, US financial giant JPMorgan Chase & Co. swiftly unveiled a monumental counter-initiative. On Monday, the bank launched its “Security and Resiliency Initiative,” pledging to deploy up to $1.5 trillion over the next decade to strengthen US supply chains, with a sharp focus on critical minerals.
The initiative spans 27 sectors, including mining, refining, solar and nuclear energy, battery storage, and defense. JPMorgan Chairman and CEO Jamie Dimon stated that the plan addresses the painful realization that the US is over-reliant on potentially unreliable sources for critical minerals, products, and manufacturing. As part of the effort, the bank will establish a dedicated $10 billion fund for direct equity and venture capital investments in US-based companies.
Meanwhile, Australia, a key US ally and a major mineral producer, is taking coordinated action. Media reports indicate that the Australian government is considering setting price floors for critical minerals and investing in new rare earth projects. The government has begun talks with miners to establish a A$12 billion (approximately US$7.77 billion) strategic mineral reserve. Proposals include government-backed loans, purchase guarantees, and direct investment in Australian projects to support domestic producers.
China’s latest export controls and the swift responses from the US and Australia highlight that critical minerals like rare earths have become a central arena in global strategic competition. As major economies accelerate efforts to build secure, diversified, and resilient supply chains, the global landscape for rare earths and other critical minerals is undergoing a profound transformation.
