Western companies say Chinese regulators now demand sensitive details such as product images and buyer lists before approving exports.
China’s tightening grip on the export of critical minerals is disrupting the U.S. defense industry, delaying weapons production and driving up costs for companies supplying the Pentagon.
Beijing, which produces about 90% of the world’s rare earths, introduced new export controls earlier this year amid rising trade tensions. Although some flows resumed after U.S. concessions in June, restrictions remain for minerals critical to defense.
A drone-parts supplier to the U.S. military said orders were delayed up to two months after its Chinese magnet shipments were halted. Prices for rare earth elements like samarium have skyrocketed, with one supplier reporting offers at 60 times the normal rate.
“In order to sustain timely product deliveries, material flow must improve in the second half of 2025,” said Bill Lynn, CEO of Leonardo DRS, which is down to its “safety stock” of germanium, a key component in infrared sensors.
Western companies say Chinese regulators now demand sensitive details such as product images and buyer lists before approving exports. Chris Thompson of New Hampshire-based ePropelled said his company refused to provide such information, prompting shipment delays.
The Pentagon, which plans to ban Chinese-sourced magnets by 2027, has invested heavily in alternative supplies, including a $400 million stake in MP Materials, the largest rare-earths mine in the Americas. But defense executives warn that new production won’t come online fast enough.
Meanwhile, even routine shipments face obstacles. The United States Antimony Corporation saw a 55-ton consignment held in China for three months before being returned to Australia.
Industry leaders caution that without immediate relief, production of weapons systems could face severe setbacks in the coming months.