Militaries, businesses and people fret about maintaining access to critical minerals used in weapons guidance systems, electricity generators and consumer electronics.

The Communist Party of China (CPC) repeatedly removes critical minerals from and returns them to international markets. The Lowy Institute notes 9 times between 2009 and 2020 that Beijing restricted critical mineral sales.  Just last week, the PRC’s Commerce Ministry announced it will impose export limits on antimony, a critical mineral whose supply Beijing dominates.

Pulling critical minerals from internationally recognized trading mechanisms advances at least three CPC goals:

• Demonstrating the vulnerability of markets ruled by laws instead of markets ruled by the wisdom and righteousness of a single authority—itself. The CPC would have other countries transfer confidence to a trading system that mimics the constancy of Chinese prudence proven through its imperial history.
• Manipulating commodity prices to create opportunities for gains to its favored parties.
• Warning its expected adversaries that the CPC holds Damocles swords over their heads—and not just for critical minerals.

Geologists find critical minerals in many places on earth. PRC-controlled companies dominate their production by avoiding costs that internationally responsible companies bear. The United States and other nations require mineral miners and processors to spend money to protect individuals and environments. CPC/controlled mineral producers skimp or dodge similar costs.

Quickly, US regulators could level international playing fields. Requiring cash deposits for and in amounts approximating the CPC’s unpaid investments in people and nature could create capital reserves to reward responsible mineral mining and processing. Doing so would raise pressure on the CPC to act as a responsible stakeholder in this world we share.

Additionally, and longer term, US buyers could counter the CPC’s supply gyrations by building their own contractual, financial and physical mechanisms to buffer price and supply uncertainties.