Tsingshan starts producing EV battery raw material nickel matte in Indonesia

The threat of "weaponizing" rare earths by China means potential sellers of the minerals to the US stand to gain from a tightened international supply and higher prices.

A report by state news agency Xinhua paints a particularly grim picture of China's rare earth industry which belies the notion that China's crackdown has more to do with managing supply and extracting lofty profits than it is about cleaning up a notoriously dirty business.

China’s grip on the global market for rare-earth metals gives it the ability to target American weaponry in its trade war with the U.S.

Rio Tinto, which is seeking to divest less profitable assets, said last November that it was selling its 69% stake in the world's longest-running open pit uranium mine to China for up to $106.5 million.

The threat to weaponize strategic materials ratchets up the tension between the world’s two biggest economies before an expected meeting between Presidents Xi Jinping and Donald Trump at the G-20 meeting next month.

The latest move signals coal power generators are under pressure from high raw material costs and the government’s plan to cut electricity charges.

On the supply side, Fitch expects production misses from Australia to keep the market tight in the coming quarters as large diversified miners lose their appetite for mining coal. 

China’s grip on the world’s rare earths market is in focus once again amid speculation the dominant producer could choke off supplies as the trade war escalates.

While iron ore prices have surged to a five-year high above $100 a tonne, not all producers of the steel-making ingredient are sharing in the bounty.