Rising tensions between the United States and China have sparked concerns that Beijing could use its dominant position as a supplier of rare earths for leverage in the trade war between the two global economic powers.China is home to at least 85% of the world’s capacity to process rare earth ores into material manufacturers can use, according to research firm Adamas Intelligence.
Several rare earth elements, such as neodymium and dysprosium, are critical to the motors used in electric vehicles. Some manufacturers have also scaled back their use of such elements, or substituted them for other metals, he said.Companies such as Raytheon Co, Lockheed Martin Corp and BAE Systems Plc all make sophisticated missiles that use rare earths metals in their guidance systems, and sensors. Lockheed and BAE declined to comment. Raytheon did not respond to a request for comment.The United States imported $160 million of rare earth compounds and metals in 2018, up nearly 17% from 2017.