China sends warning it can cripple US defence system by turning off rare earths tap – by Robin Bromby (Small Caps.com.au – October 28, 2020)

Small Caps

China is reported to be cutting off rare earth supplies to the United States defence manufacturer Lockheed Martin and other American companies in retaliation for the companies supplying Taiwan with military hardware.

But this move should not be read merely as a tit-for-tat against a few particular companies. It is, however, a clear signal to the US defence establishment that China holds the whip hand.

Rare earths are crucial in the manufacture of advanced weapon applications. Without them, the Chinese could hobble the US military (and the forces of its allies) while itself having full operational capacity in a time of conflict.

The US gets 80% of its rare earths from China. That is the officially quoted figure but with Australia’s Lynas Corp (ASX: LYC) the only non-China supplier of any considerable substance, the percentage is probably higher.

US weapons depend on rare earths

According to one report this week, a Virginia class submarine (a nuclear powered fast-attack boat armed with cruise missiles) requires 4.2 tonnes of rare earth metals, a new Navy destroyer consumes 2.3t of rare earths and an F-35 fighter — the attack aircraft now being used by the Royal Australian Air Force — needs 450kg of the vital metals.

For the rest of this article: https://smallcaps.com.au/china-sends-warning-cripple-us-defence-system-turning-off-rare-earths/

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