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China's "Quasi-Monopolistic" Grip On Critical Materials Ignites Western Supply Race: First To Deliver Wins Big

Zero Rss
1 month ago
China's "Quasi-Monopolistic" Grip On Critical Materials Ignites Western Supply Race: First To Deliver Wins Big

The global push toward electrification carries several risks, including replacing dependence on foreign oil and natural gas with reliance on Chinese technology and critical materials, as access to cheap electricity dictates investment flows and where AI and industrial bases thrive.

Christian Keller, Barclays' global head of economics research, co-authored a note Tuesday on how rapidly accelerating geopolitical fragmentation and surging power demand are rewiring the global economy. He argued that countries must secure traditional fuel supplies while investing heavily in electricity generation, grids and storage.

Keller identified China's near-total control of more than 95% of critical material refining in areas such as heavy rare earths as a major vulnerability for countries dependent on those supplies.

Critical materials whose mining or refining China controls are critical inputs for electricity infrastructure, industrial production, the upcoming rearmament cycle, and the AI data center buildout. Replacing Chinese supplies requires far more than discovering new deposits and will take years. 

For the West, building competitive supply chains outside China, from mining critical materials such as tungsten to refining rare earths and manufacturing magnets, will be extraordinarily difficult and time-consuming. China's dominance in the space is expected to persist through at least 2030 despite ongoing Western efforts to diversify.

"China's quasi-monopolistic position provides it with significant geopolitical leverage," Keller warned.

A Reuters report late last week revealed that some Chinese rare-earth suppliers were refusing to ship materials to US customers. The report suggests supply disruptions remain a major issue ahead of the Trump-Xi meeting scheduled for later this month.

Here is Keller's warning for the West: 

Negotiating critical minerals supply chains

Electrification is only likely to advance as a global trend. Especially in energy-importing countries, being key for achieving energy sovereignty (next to lowering carbon emissions). In turn, that transition towards an electricity-dominated system is contingent on critical minerals (Transition minerals: unearthing opportunities from a $500bn supercycle). However, the global reserves of these minerals are often concentrated in certain locations: eg, lithium (over 30% in Chile), cobalt (over 50% in DR of Congo), nickel (over 40% in Indonesia). Moreover, the degree of processing is often crucial, potentially also making small reserves valuable, if fully processed.

In this context, China plays a crucial role, given its tight control over the global critical mineral supply chain and refining capacity, including graphite, gallium and rare earths (Figure 10 & Figure 11). China's quasi-monopolistic position provides it with significant geopolitical leverage. Other countries also use export controls for minerals where they have dominant positions to gain strategic leverage, eg, Indonesia with nickel and bauxite.

Hence, critical minerals will likely play central roles in international negotiations about trade or geopolitical settlements. The US tariff concession to Beijing in order to retain access to rare earths and its plan to build its own rare earth mining and refining capacities are likely only the beginning . Efforts to re-shore minerals mining and refining capacity are also likely to take time, as shown by the persistent concentration of value chains projected out to 2030 (Figure 12). Potential conflicts over critical minerals access in some of the already unstable African regions are also likely. Australia could play an increasingly important role, given its abundance and diversity of reserves in critical minerals and rare earths.

The key complement to resources in the ground are the capital flows to provide the necessary financing. Here, capital-rich advanced economies such as those in Europe could try to increase their role. However, as Figure 13 and Figure 14 show, despite the industrial strategy efforts of governments in the West, building out a comprehensive and cost-effective 'mine to magnet' value chain decoupled from China is extremely difficult and likely to take time.

Overall, economic statecraft involved in securing critical mineral supply chains will become a mix of export controls, foreign investment restrictions, access to foreign capital, and sanctions, possibly project-focused and with changing alliances.

Keller's warning underscores why we've made China decoupling a core investment theme, building on our nuclear theme, AI buildout, and powering up America themes, highlighting companies such as MP Materials and Almonty as the West races to secure alternative critical material supplies.

Breaking Beijing's "quasi-monopolistic" grip will require operating mines, processing capacity, and reliable deliveries. Many junior miners still face years of permitting, financing and construction before producing their first commercial shipments. Companies that can bring supply online sooner could capture a crucial early market advantage, such as Almonty's ex-China tungsten production ramping up in South Korea. 

Jefferies initiates critical mineral companies Almonty, Materion, USA Rare Earth and Neo Performance with Buy; the firms are expected to benefit from increased demand for supply outside of China.

Almonty (buy, PT $26.25)

Sees Almonty offering public exposure to Western tungsten…

— zerohedge (@zerohedge) September 2, 2026

The SPDR S&P Metals & Mining ETF (XME) has yet to confirm another breakout but certaintly coiling. 

Related:

For readers, the decoupling theme is about identifying miners already producing and able to close the supply gap. The opportunity lies in who can deliver first in size.

Tyler Durden Tue, 09/08/2026 - 21:20
Tyler Durden

US Navy's New Air-To-Air Missile AIM-424 Malice: Countering China's Growing Airpower

Zero Rss
1 month ago
US Navy's New Air-To-Air Missile AIM-424 Malice: Countering China's Growing Airpower

By Rick Fisher, senior fellow at the International Assessment and Strategy Center.

With its revealed range in “excess of 250 nautical miles” (287 miles), the U.S. Navy’s new long-range air-to-air missile (AAM) constitutes a major upgrade in the ability of the United States to arrest China’s quest for superior air power in Asia.

On May 7, 2025, Chinese air combat technology gave Pakistan a historic, beyond-visual-range (BVR) victory, when, during a record aerial engagement between 72 Indian Air Force and 42 Pakistan Air Force combat jets—that did not enter the other’s territory—Pakistan claimed to have shot down five Indian combat aircraft at ranges approaching a record 125 miles, including three French-made 4.5-generation Dassault Rafale fighters.

Pakistan’s victory was enabled by its acquisition of 20 Chengdu Aircraft Corporation 4.5-generation J-10CE fighters, equipped with an estimated 105- to 125-mile-range active electronically scanned array (AESA) radar, and armed with 125-plus-mile-range Luoyang PL-15E (‘E’ for export model) long-range AAMs.

When long-range AAM engagements exceed the range of the fighter’s radar, “off-board cuing,” or guidance, is necessary, such as from Pakistan’s Chinese-made Shaanxi KJ-500 airborne warning and control system (AWACS) with an estimated 300-mile-range AESA radar, but these reportedly were undergoing modifications and were not in the battle.

But Chinese-source rumors at the time credited China with helping Pakistan fight this air battle by providing satellite and perhaps electronic intelligence that helped enable maximum-range interceptions by Pakistan’s PL-15 AAMs.

This performance has also finally encouraged more foreign sales for the J-10CE, with Uzbekistan now taking delivery of about 12 to 24, and Bangladesh and Algeria reportedly close to placing orders for 20 to 30 each.

China’s very large investment in longer-range and self-guided AAMs provides the “tip-of-the-spear” for Beijing’s massive investment in air superiority, starting with the 2000 purchase of 50-mile-range Russian Vympel R-77 self-guided AAM technology to enable the 60-mile-range Luoyang PL-12 by 2005—similar to early versions of the U.S. Raytheon AIM-120 AMRAAM.

By 2011, China was providing the first glimpse of its Luoyang PL-15 being carried in the internal weapons bay—to preserve stealth—of a prototype Chengdu J-20 fifth-generation heavy fighter, with an estimated range of up to 190 miles, far outranging the best U.S. fifth-generation Lockheed Martin F-22A and AIM-120 combination.

Furthermore, in 2016, China’s People’s Liberation Army Air Force (PLAAF) revealed its longer-range Luoyang PL-17, carried externally on a Shenyang Aircraft Corporation J-16 heavy twin-seat strike fighter, reportedly in PLAAF service since 2022.

These advanced Chinese AAMs can now arm 1,838 fourth- and fifth-generation fighters in the PLAAF, according to the latest annual Defense White Paper of the Japanese Ministry of Defense.

These now include: 308 J-20 fifth-generation fighters, whereas the Obama administration halted F-22A production at 187; 350 J-16 fighters compared to only 133 of the similar U.S. Air Force (USAF) Boeing F-15E heavy twin-seat strike fighter; and 608 J-10 fighters, more than 300 of which may be AESA-equipped J-10B and J-10C fighters, compared to about 150-plus USAF Lockheed Martin F-16C AESA-modified fighters.

But long-range BVR engagements by these fighters can be enabled by about 100 PLAAF AWACS platforms, including about 90 KJ-500s, whereas the USAF has had to fight furiously to secure funding for 26 next-generation Boeing E-7 Wedgetail AWACS with new AESA radar.

In addition, the PLAAF is working toward the sixth generation of air combat power, and since late 2024, it has been testing sixth-generation fighter aircraft from the Chengdu and Shenyang corporations, and by September 2025, it had revealed five types of future autonomous unmanned fighters or collaborative combat aircraft (CCAs) that will employ artificial intelligence (AI) to extend the survivability and combat reach of manned fighters.

So it is an understatement to say that the United States, which fought hard to achieve air superiority over the Soviet Union to keep the Cold War from turning hot, is now in a vital race to ensure that U.S. air power can continue to deter global conflict with China and its Russian and North Korean allies.

Central to the U.S. air power investment is the Lockheed Martin fifth-generation F-35 medium-weight fighter, which now has about 800 of a planned purchase of 2,450, to be extended by a networkable virtual “aerial alliance” of 700 to 800 more F-35s ordered by non-U.S. air forces.

The F-35 likely employs the world’s superior AESA radar, along with ultra-long-range optical sensors and perhaps the world’s best offensive/defensive electronic warfare systems, with advanced networking, and is capable of providing off-board cueing for ground-launched missile interceptors.

By the early 2030s, the USAF expects to take delivery of the Boeing F-47 sixth-generation fighter, with technology development prototypes having flown in 2020. The U.S. Navy is expected to select its sixth-generation fighter developer later this year.

To multiply and extend its combat power, the United States plans to acquire up to 1,000 CCAs and is now testing prototypes developed by Anduril and General Atomics.

But central to the American air power investment for more than a decade has been an effort to develop better, longer-range AAMs to keep pace with and overtake the Chinese AAM threat.

In addition to continually improving and extending the range of the AIM-120, the U.S. Navy has led the development of the Raytheon AIM-174B Gunslinger, revealed in July 2024, with a classified range estimated at up to 300 miles, but this large AAM can only be carried externally.

In development since at least 2019, the first images emerged in May this year of the estimated 120-plus-mile-range Raytheon AIM-260 AAM, which is close in size to the AIM-120 and can be carried internally by the F-22A and F-35.

But on Aug. 22, reporting from a Reno, Nevada, symposium of the Tailhook Association, a nongovernmental organization that supports naval aviation, Aviation Week and Space Technology magazine first revealed the U.S. Navy was “flight testing” the AIM-424 Malice.

About a day later on its webpage, the U.S. Navy revealed size and performance data for the AIM-424 Malice, to include a range in “excess of” 287 miles—with unofficial estimates approaching 400 miles—and a size that would allow internal carriage by the F-35 and the F-22A.

Images of the AIM-424 reveal that it is a two-stage AAM, meaning that unlike single-stage long-range AAMs, it has a better chance of sustaining high energy, or speed, to ensure lethality at the end of its engagement.

China’s immediate response has been to throw “shade” at the AIM-424, with Chinese state media Guancha publishing Aug. 28 commentary by Taiwanese expert Lu Shili saying:

“I believe that at this stage [AIM-424] is still more of a concept, and its main function is to respond to the development of China’s long-range air-to-air missiles and prevent the United States from looking too bad in terms of public opinion and equipment comparison.”

For sure, the Chinese Communist Party dearly wants to preserve its promoted image that its new air combat technology is superior to that of the United States, even though it has only been demonstrated in one, albeit large, air battle.

But the reality is that since World War II, the United States has been, and intends to remain, the world’s superior air power, a fact just affirmed by the revelation of the AIM-424 Malice.

Tyler Durden Tue, 09/08/2026 - 20:55
Tyler Durden

Iran Says Basij Force Commander Killed In Mystery Insurgent 'Terror Attack'

Zero Rss
1 month ago
Iran Says Basij Force Commander Killed In Mystery Insurgent 'Terror Attack'

American and Israeli officials have continued to speculate about fomenting some kind of internal rebellion or large-scale street uprising inside Iran, in hopes of toppling the leadership of the Islamic Republic. Bombs have largely fallen silent, for now.

But the longer the Iran war drags on, amid sporadic tit-for-tat action between US and Iranian forces as they clash over who controls the Strait of Hormuz, the more unlikely the kind of groundswell of protests like what was seen last January will be.

The Trump administration is betting that long-term severe economic 'D-Day' sanctions will eventually break Iranian society, but there's also the reality that a wartime and de facto martial law situation now makes large public anti-government demonstrations all the more difficult. It is also the case then when a country is under attack, there is a 'rally around the flag effect' - making it further easier for authorities to stamp out dissent before it spreads. And without doubt, Iran leaders have genuine support across various sectors of the Iranian populace, as they face down the United States.

via Iran state media

Additionally, it has been a longtime claim of Iranian officials that Israeli Mossad has infiltrated and in some cases armed protest groups.

"They have trained some people inside and outside the country; they have brought in some terrorists from outside," President Masoud Pezeshkian had said of Israeli and foreign intelligence back in January, amid the violent economic unrest that served as a precursor to Trump launching Operation Epic Fury.

Fast forward to now more that six months into the US-led war, and there are still instances of ground level deadly confrontations between Iranian security services and mysterious armed 'opposition' entities.

The AFP and Israeli media report of a fresh incident, "A local commander in Iran’s paramilitary Basij force was killed in a 'terrorist attack' in the country’s restive southeast, local media reports." According to more:

Abdolraouf Eshaghi, a commander in the Parud district of Sistan-Baluchistan province, had been “martyred,” the semi-official Tasnim news agency says, without providing details. It is not immediately clear who was behind the attack.

Yesterday, Iranian authorities said three people were killed and nine arrested during a raid in the province on hideouts of Islamist groups it claimed were affiliated with Israel and the United States.

However, armed clashes with ethnic groups which have separatist movements and leanings are nothing new for Iran, particularly in restive Sistan-Baluchistan province. That province has witnessed a long pattern of attacks on IRGC and Basij units by Baloch insurgent groups, going back decades.

While Iranian society is overwhelmingly Shia, most of the border province's large Baloch population is Sunni. But Tehran has long been worried that foreign intelligence could 'weaponized' the impoverished Sunni population, and a similar thing has been at issue with the Iranian Kurdish minority, which tends to be in the mountainous north of the country near Iraq. So this is a plausible scenario and very real possibility.

Trump back in April openly boasts "we sent some guns" to the "people of Iran"...

Trump:

We sent some guns; they were supposed to go to the people of Iran. You know what happened? The people we sent them through kept them.

I am very upset with a certain group of people, and they will pay a big price for that. pic.twitter.com/dACg5aZyMS

— Clash Report (@clashreport) April 6, 2026

It should also be noted that similar dynamics were at play during the lengthy Syrian proxy war. Washington and Gulf allies funded, trained, and armed Sunni radical insurgent groups as well as Kurds, which pressured Damascus from the north and east of the country.

Tyler Durden Tue, 09/08/2026 - 20:30
Tyler Durden

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