One Sweet and Sour Dysprosium Oxide and a Manganese and Cobalt Spare Ribs
China is weaponising Rare Earths and Resources in its Western Aspirations
A small piece in my weekly US Rig report (I don’t know why I do either) tells me that the current positioning of hedge fund money reflects a measure of market doom and gloom. I thought that simple phrase summed up the week, rather nicely.
In the background, the story of the Chinese-Spy-Case-That-Wasn’t saw spats in the Commons; with Tom Tugendhat telling Cabinet Office minister Chris Ward, who was wriggling at the despatch box, over the CPS farce, “Stop playing politics, you petty little man!” Minutes later, Jeremy Wright asked Mr Wright: “Why did the Deputy National Security Adviser, in his statement, [make] reference to economic opportunity, when he knew that wasn’t the question he was being asked, or the relevant question?” About an hour later, it transpired that the final paragraph of the third witness statement provided by the DNSA, allegedly unseen by any Socialist in power, contained passages directly lifted from the 2024 Labour Party election manifesto. Maybe everyone in the Socialist movement is a Chinese Spy.
I picked up my coffee to continue reading about “doom and gloom”, when The Economic Times of India landed in my inbox, telling me that Mauritius had signed an agreement with India this week to allow Modi’s Mates the right to set up a ‘satellite tracking station’ near Chagos. The ETI describes the new base as a “strategic asset for monitoring the region”. It reported: “India and Mauritius also signed an agreement on hydrography to conduct joint surveys, prepare navigation charts and share hydrographic data of the Mauritius EEZ. Modi said India remained committed to enhancing maritime security and the capacity of Mauritius.” The deal also includes hydrographic work in the Chagos Marine Protected Area – the waters around Diego Garcia – which were also signed over to Mauritius. It is assumed that this will further require an Indian-controlled, newly constructed airstrip and harbour.
I shall be unsurprised if the Chinese don’t offer to build this crucial scientific centre dedicated to solving global warming, world peace and the selection of the next Miss World. Another part of me wondered why it had taken so long and why, when anyone writes the word India, they don’t write China by accident.
People still don’t get it. We keep tiptoeing around using the language of diplomacy, so that clever PPEs can transcribe and tell us what might be being implied. Thus, at brunch time, before I started really ticking, MI5’s chief, Ken McCallum, was giving his annual speech on threats to the UK, in which he said state actors, including China, are an increasing problem. That is like saying that stopping breathing underwater can become an increasing problem.
McCallum said China engages in “cyber espionage, clandestine technology transfer,”... and makes every effort to “...interfere covertly in UK public life,” together with the “...harassment and intimidation of opponents.” He said China, Russia, and Iran are also “fast-rising state threats which are responsible for a 35% increase in threats from state actors in a year… On the subject of the abandoned Chinese Spy court case, he said: “Of course, I am frustrated when opportunities to prosecute national security-threatening activity are not followed through, for whatever reason. I would invite everyone not to miss the fact that this was a strong disruption in the interest of the UK’s national security.”
Burning with indignation, coffee was not the answer. What I needed was about 500gms of betablockers! Then, amongst the rest of the oil, gas and minerals woes, the following snippets caught my eye:
China’s leading refiner Sinopec has diverted the 2MMbl New Vista supertanker carrying the UAE grade Upper Zakum, to a new port.
China‘s rare earth exports showed a 31% decline month-over-month, and September was the third consecutive monthly drop as Beijing tightens the screws on flows to Western buyers.
India has launched a $77 billion expansion plan to move 76 GW of hydro generation away from the Brahmaputra Basin bordering China, as Beijing could cut dry-season flows by 85%.
When the price of dysprosium oxide—a metal few outside the tech world have heard of—spiked nearly 50% overnight, defence contractors and carmakers from Washington to Berlin scrambled, because once again the Great Game’s Master Xi Jinping had made another move in his high-stakes strategic game for control over the world’s most critical minerals.
In the quiet battles of global influence, the ground beneath our feet is becoming the newest, most potent battlefield. China, long the undisputed heavyweight in the processing and supply of critical minerals—from rare earths vital for F-35 fighter jets to cobalt essential for electric vehicles—is now overtly weaponising this dominance. Recent moves, particularly in the realm of export controls and resource acquisition abroad, paint a clear picture: Beijing’s Western aspirations are not merely about economic growth, but about strategically undermining rivals and asserting a new global pecking order.
Rare earths, or critical minerals, are a group of 17 elements essential for high-tech devices, electric vehicles, and advanced defence systems. Their unique properties make them indispensable to modern economies.
China’s current position in the critical mineral supply chain is one of near-total leverage, providing the foundation for its geopolitical manoeuvring. That said, the real power isn’t in mining; it lies in their ability to refine and control the supply chain’s chokepoints—a process so complex that few countries can even attempt it.
Firstly, they have the majority of the globe’s processing capabilities. According to two government sources, China controls approximately 85% to 90% of the world’s rare earth refining and processing capacity (USGS, European Commission). Secondly, Chinese companies produce an estimated 92% of the world’s permanent rare earth magnets (European Commission), which are indispensable for electric vehicle motors, wind turbines, and advanced defence systems. Thirdly, this directly impacts military capabilities as the U.S. Government Accountability Office (GAO) warned, with approximately 90% of precision-guided weapons systems relying on rare earth permanent magnets. For instance, each F-35 fighter aircraft requires approximately 417kg of rare earth materials. China’s control over this chain directly impacts Western defence readiness.
The most conspicuous and concerning development in the past year has been China’s aggressive expansion of export restrictions. This isn’t just about managing domestic supply; it’s about control. Beijing has significantly tightened the flow of critical rare earth elements and the related technologies required for their extraction and manufacturing. New regulations extend Beijing’s reach globally, demanding approval for exports of products manufactured outside China if they contain more than a trace amount of Chinese-origin rare earths or were made using Chinese technology. The economic impact is already being seen. Following China’s expanded export controls in late 2024 and early 2025, prices for key heavy rare earths have shown significant price volatility, signalling supply disruption. For example, Dysprosium oxide prices increased by 49% and Terbium oxide prices rose by 54% during 2024 (Asian Metal/Fastmarkets). The price of Neodymium-Praseodymium (NdPr) oxide, vital for high-strength magnets, surged to around $88 per kilogram in 2025, a 40% increase from its earlier 2025 lows, illustrating the market’s immediate response to supply uncertainty (Adamas/Benchmark Minerals).
These fluctuations and market distortions directly lead to higher prices for electric vehicles, electronics, and renewable energy technologies, potentially slowing the green transition for consumers worldwide. The clear intent is to strangle any industry deemed critical to Western economic and military power. By dictating who gets what, and under what terms—even applying to foreign-made products containing as little as 0.1% Chinese-sourced rare earth materials—China gains immense leverage in trade disputes and technological competition.
Beyond its borders, China’s geological activities in resource-rich nations, particularly in Africa, reveal another facet of its strategy: securing essential inputs with a ruthless efficiency that often sidesteps ethical and environmental norms. For example, the Democratic Republic of Congo (DRC) accounts for more than 70% of global cobalt production, and Chinese state-owned enterprises have established commanding control over the majority of this extraction and refining capacity (S&P Global Market Intelligence). We have seen a surge in China’s direct foreign investment in Africa, particularly targeting critical minerals, reaching $3.96 billion in 2023, an increase of 118.8% year-on-year, reflecting Beijing’s intensified focus on securing supplies essential for its manufacturing ecosystem (Statistical Bulletin of China’s Outward FDI). That in turn has led to China becoming the largest importer of Africa’s critical minerals, including 72% of its Cobalt and 58% of its Manganese, further deepening the continent’s dependency on the Chinese processing market (Stimson Centre).
By acquiring these resources at speed, often at significant local social and environmental costs, Chinese firms can secure vast quantities of vital minerals—cobalt, lithium, copper—to fuel their dominant battery and clean energy sectors.
The implication is stark. China is willing to acquire the necessary resources by any means to fuel its own industrial complex, accelerating its technological advancement and maintaining its lead in next-generation industries while leaving Western nations struggling to catch up on ethical sourcing and sustainable supply chains.
Faced with Beijing’s tightening grip, Western governments are scrambling to diversify supply chains and invest in domestic extraction. The U.S. and EU have announced new funding for rare earth processing and recycling, while forging resource partnerships with allies from Canada to Australia. Yet, progress is slow—China’s decades-long head start means breaking free from its orbit will require unprecedented cooperation, innovation, and political will. The world’s next technological leap—and perhaps its security—may hinge on how quickly democracies can muster a united response. The battle for rare earths isn’t just about metals. It’s about who sets the rules for the 21st century.
China’s actions are not random acts of commerce. They represent a sophisticated, multi-pronged strategy to reorient global supply chains and exert decisive control over the foundational elements of modern technology and defence. For Western nations, these are not merely economic disruptions; they are a clear call to action, demanding urgent investment in domestic resource capabilities and a united front to counter Beijing’s aggressive, resource-based geopolitical manoeuvring. The new Great Game is indeed being played, and the stakes—control over the 21st century’s most vital resources—could not be higher.
In case I’m confusing anyone, WAKE UP!
China is our enemy, and China is waging war on the West.
GOODNIGHT & GOOD LUCK.