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| China Rare earths and Gallium |
China’s Export Controls Threaten US Mineral Supply Chains
China’s export curbs on rare earths and gallium could reduce US GDP by over $1 billion annually. Meanwhile, the US remains heavily dependent on imported critical minerals. Macquarie highlights that strategic industries, including defense and semiconductors, face significant supply risks. Therefore, China critical minerals impact is both economic and geopolitical.
In 2024, the US imported $65 billion worth of critical minerals, with China supplying $2 billion. Major US sources included Canada (32%), Chile (10%), Mexico (8%), and South Africa (7%). However, around 70% of rare earths and gallium imports originate from China. Consequently, supply disruptions would affect high-tech manufacturing and national security.
Australia Emerges as Strategic Alternative
Macquarie identifies Australia as a potential replacement for Chinese imports. Australia holds 15% of global critical mineral reserves and produces nearly half of the US critical minerals list. Moreover, over $50 billion of investment is planned for the coming years. As a result, diversifying supply through Australia could mitigate the China critical minerals impact on the US economy.
ScrapInsight Commentary
China’s rare earth and gallium export curbs pose both economic and strategic risks to the US. Diversifying sources, particularly through Australia, is essential. Investors and policymakers must monitor global critical mineral flows to secure supply chains.
