A wheel loader operator fills a truck with ore at the MP Materials rare earth mine in Mountain Pass, California, US, January 30, 2020.
Steve Marcus | Reuters
Shares of rare earths and important minerals rose in the United States on Thursday after China tightened restrictions on exports, sparking market speculation that the Trump administration will move more aggressively to invest in building a domestic supply chain.
Ramaco Resources rose 12% Energy fuel rose about 8% USA rare earths jumped more than 7%, and MP materials It rose more than 6%. Americas Lithium More than 4% emerged and Metal Trilogy It rose more than 6%.
Beijing demands now Foreign entities to obtain a license To export products containing more than 0.1% rare earth elements from domestic sources, according to the Chinese Ministry of Commerce. Companies will also need export licenses if they use magnet extraction, refining or recycling technology in China.
“The White House and relevant agencies are closely evaluating any impact of the new rules, which were announced without any notice and imposed in an apparent attempt to exert control over the entire world’s technology supply chains,” a White House official told CNBC.
China imposed the restrictions ahead of an expected meeting between President Xi Jinping and President Donald Trump on the sidelines of the Asia-Pacific Economic Cooperation summit in Seoul, South Korea, later this month. Rare earths have been a major point of contention in trade talks between Beijing and Washington.
“chicken game”
The White House and the US critical metals industry have accused China of manipulating the market to keep foreign competition out of business. Rare earths and critical minerals are critical inputs to America’s weapons platforms, robotics, electric vehicles, and electronics, among other applications.
The Trump administration took stakes in MP Materials, Lithium Americas and Trilogy Metals this year as it seeks to position itself in the domestic supply chain against China.
Rare Earth and Energy Fuels USA has not struck deals with the White House, but its executives told CNBC they are in close contact with the Trump administration.
“It’s going to take a lot of players to build this market,” Barbara Hampton, CEO of USA Rare Earth, told CNBC on Oct. 2.
China’s export restrictions “help ensure a strong position for Xi to sit down with Trump” on the sidelines of the summit in South Korea, Evercore ISI analyst Niu Wang told clients in a note on Thursday.
“Although Beijing and Washington learned their lesson the hard way in their last exchange of export controls in April and May, China’s stronger resilience rooted in its political system increases the credibility of its threats in the game of chicken,” Wang wrote.
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