China says U.S. and Australia ‘should play a proactive role’ to bolster rare earth supply chains

China on Tuesday responded to the U.S.-Australia critical minerals deal by saying resource-rich rare earth countries should take “a proactive role” in stabilizing their critical minerals supply chains.

A spokesperson for China’s Ministry of Foreign Affairs was asked about the U.S. and Australia critical minerals deal which has been framed as an effort to counter Beijing’s dominance.

“The formation of global production and supply chains is the result of market and corporate choices,” Guo Jiakun said, according to NBC.

“Resource-rich nations with critical minerals should play a proactive role in safeguarding the security and stability of the industrial and supply chains, and ensure normal economic and trade cooperation,” he added.

Rare earths are a category of minerals that are critical for a swath of products from cars to semiconductors.

U.S. President Donald Trump and Australian Prime Minister Anthony Albanese on Monday signed an agreement at the White House intended to boost the supplies of rare earths and other critical minerals.

The framework agreement, which was described as an $8.5 billion deal between the allies, comes shortly after China imposed more stringent export controls on rare earths.

China’s Commerce Ministry earlier this month announced expanded curbs on the export of rare earths and related technologies, seeking to prevent the “misuse” of minerals in the military and other sensitive sectors.

Western automotive industry groups have been among those to raise the alarm over the new export controls, saying the measures could pave the way to a period of supply chain chaos.

Demand for rare earths and critical minerals is expected to grow exponentially in the coming years as the clean energy transition picks up pace.

China is the undisputed leader of the critical minerals supply chain, accounting for roughly 60% of the world’s production of rare earth minerals and materials. U.S. officials have previously warned that this poses a strategic challenge amid the pivot to more sustainable energy sources.

— CNBC’s Evelyn Cheng contributed to this report.