US targets China’s rare earths dominance with minerals-security finance network

The United States announced the establishment of a minerals-security finance network with its allies on Monday, the latest step in its bid to halt China’s global dominance of critical minerals.

The joint finance network will be used to “strengthen cooperation and promote information exchange and co-financing” among participating institutions from Indo-Pacific and European nations, according to the US State Department. It will also “advance diverse, secure and sustainable supply chains for critical minerals”.

The network was the latest initiative out of the Minerals Security Partnership (MSP), a framework the US set up with 13 countries and the European Commission in 2022. It aims to diversify the countries’ supply chains for critical minerals amid an intensifying US-China tech rivalry. The US also rolled out a chip ban against China in 2022.

Its unveiling came as leaders of the Quadrilateral Security Dialogue, or Quad, pledged during a weekend summit in Delaware to “focus near-term efforts” on boosting mineral production across their countries.

China produces nearly two-thirds of the world’s rare earth metals and has imposed export controls on minerals such as graphite and gallium that are critical for making semiconductors and electric vehicles.

Beijing’s actions came in response to Washington’s ramped-up chip restrictions as the two economic giants increasingly face off over technology.