Is China Using Cyberattacks To Maintain Its Rare Earth Dominance?
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China currently controls as much as 80% of the global rare earth supply.
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As more firms aim to chip away at China’s dominance, there are growing suspicions that the CCP is using cyberattacks against rare earth companies to maintain its influence.
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US cybersecurity firm Mandiant and Albert Zhang, a researcher at the Australian Strategic Policy Institute, both allege these attacks were China’s deliberate attempt to block President Joe Biden’s efforts to build a critical minerals industry in the US.
For the longest time, the world relied solely on China for its supply of rare earths. Now, it seems that most countries have woken up to the “rare earths reality.” That is, we are starting to understand how important these elements are for vital sectors like defense as well as for products we use every day, like cars. Moreover, we’re starting to realize that we can’t let one single nation control the entire supply chain.
This changing attitude has encouraged many countries, including the US, to start tapering their reliance on China for critical metals and minerals. However, it’s possible this shift has not gone over well with the Chinese government. This is particularly evident given the growing number of cyber attacks on rare earth producers of late.
The most recent example targeted Australia’s Lynas Rare Earths Ltd. According to reports, the company fell victim to a series of cyber attacks from social media accounts potentially linked to the Chinese Communist Party. A few months prior, US cybersecurity firm Mandiant alleged that Chinese government-funded programs were spreading disinformation. This time, the target of their ire was Canadian rare earths miner Appia Rare Earths & Uranium Corp.
Why Attack Rare Earths Firms?
Experts believe that China simply doesn’t want any other country to develop rare earth production capabilities. After all, their success would quickly erode China’s position as the world’s largest rare earths miner. Therefore, these cyber attacks are likely a way of destabilizing the investment plans of Western companies in the field.
This isn’t the only strategy at work. For instance, earlier this year, China announced it was setting up a new state-owned enterprise, China Rare Earth Group. This new organization will control 60-70% of the country’s rare earth production, which amounts to 30-40% of the global supply.
It represents the next logical step in the country’s market domination. Even back in the early 2000s, Chinese state-owned companies were already investing billions in foreign nations to secure long-term supplies of critical minerals.
Lynas, the victim of the latest cyber attack, is actually the world’s largest producer of rare earths outside China. It already has an operating processing plant in Malaysia and is constructing multiple other facilities in the US and Australia. In fact, reports indicate the recent attack largely focused on this upcoming US plant. Indeed, the same bot campaign against Lynas, known as “Dragonbridge,” was also identified by Mandiant.
Are We Witnessing the Beginning of a New Commodities Strategy?
The real question at hand: will this become the “new normal” for non-Chinese rare earths companies? According to Albert Zhang, a researcher at the Australian Strategic Policy Institute, these attacks are just the beginning. In fact, both Zhang and Mandiant claim these attacks were China’s deliberate attempt to block President Joe Biden’s efforts to build a critical minerals industry in the US.
Rare earths are important because of their use in a range of high-tech, green technology, and military applications. Given the current growth rate of these sectors, there’s no denying these minerals will become more important. Right now, the US Geological Survey estimates that China controls about 80% of the rare earths industry, which certainly gives them a lot to lose.
As Canada, Australia, and the US make efforts to establish their own supplies, China may retaliate in any number of ways. In fact, corporate sabotage may already be on the table. We’ll have to wait to see what else the CCP has up its sleeve.
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