ZGXT(SZ:000831) Ge Long Hui·2025-11-02 05:19Core Insights - The article discusses the strategic importance of rare earth elements (REEs) and how China's control over these resources has significant implications for both technology and military capabilities [1] Industry Overview - Rare earth elements possess unique physical and chemical properties that can dramatically enhance material performance, making them irreplaceable in various applications [1] - REEs are critical for modern technology, particularly in the production of neodymium-iron-boron permanent magnets, which are essential for electric vehicle motors and consumer electronics [1] - The military sector relies heavily on heavy rare earths for high-temperature magnetic applications, crucial for advanced weaponry and defense systems [1] China's Dominance - China holds approximately 40% of global rare earth reserves, 70% of production, and 90% of processing capacity, making it a dominant player in the REE market [1] - The Bayan Obo mine in northern China is a key source of light rare earths, while unique ion-adsorption rare earth mines in Jiangxi are vital for heavy rare earths, resources that are scarce in the U.S. and Australia [1] - China's advanced separation technology for REEs presents a significant barrier to entry for other countries, as the chemical properties of the 17 rare earth elements are very similar [1] Supply Chain Implications - The U.S. heavily relies on China for rare earth imports, with 77% of its REE imports coming from China, highlighting vulnerabilities in the supply chain for critical military and technological applications [1] - The complete supply chain established by China, from mining to material manufacturing, positions it as the largest producer of rare earth permanent magnets, accounting for over 90% of global production [1] - Recent geopolitical tensions have prompted the U.S. to recognize its dependency on Chinese REEs for advanced military systems like the F-35 fighter jet and Patriot missile systems [1]