China Launches New Precision Strike Against Pengaton Rare Earth Supply Chains

Rhea-AI Summary

China has announced new export restrictions on strategic rare earth elements, targeting critical minerals essential for U.S. defense systems and various industrial sectors. The restricted elements include samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium.

NioCorp (NASDAQ:NB) Executive Chairman and CEO Mark A. Smith warns that this move represents a significant threat to U.S. national security, particularly affecting Pentagon supply chains for advanced weapons systems, including stealth fighters, precision-guided munitions, satellites, and hypersonic weapons.

The restrictions, announced by China's Ministry of Commerce and General Administration of Customs, cover metals, alloys, oxides, compounds, and related products. NioCorp is developing a critical minerals project in Nebraska that aims to produce these restricted rare earths, along with niobium, titanium, and scandium.

Positive

• NioCorp's Nebraska project positions it to potentially fill the supply gap for restricted rare earth elements
• Company's strategic position strengthened as one of few non-Chinese rare earth producers

Negative

• Immediate disruption to U.S. defense and technology supply chains
• Increased geopolitical tensions affecting rare earth markets
• Potential delays and disruptions in military equipment production

Insights

Geopolitical Risk Analyst

China's strategic export restrictions on key rare earth elements represent a calculated escalation in resource-based geopolitical competition with significant implications for both national security and market dynamics. This isn't merely about materials access - it's a sophisticated leverage play targeting critical defense supply chains.

The restricted elements (samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium) are irreplaceable components in advanced defense systems including stealth technology, guidance systems, and communications infrastructure. This restriction creates an immediate vulnerability window until alternative supply chains develop.

For NioCorp, this development transforms their Nebraska rare earths project from a commercial venture into a strategic asset with national security implications. The company is positioned to potentially fill a critical gap in domestic rare earth production - particularly for the restricted heavy rare earths that are most difficult to source outside China.

While NioCorp's CEO commentary appears alarmist, the underlying concern is valid. The U.S. defense industrial base faces genuine constraints without reliable access to these materials. This situation likely accelerates governmental support for domestic critical mineral projects through funding, permitting assistance, and potential offtake agreements from defense contractors eager to secure supply.

The timing suggests a coordinated response to recent Western restrictions on advanced technology exports to China, demonstrating Beijing's willingness to leverage its resource dominance as a countermeasure in broader strategic competition.

Mining Industry Specialist

China's export restrictions on seven rare earth elements creates a significant market opportunity for NioCorp's Elk Creek project in Nebraska. These restrictions target precisely the high-value heavy rare earths where China has maintained near-monopoly control of global processing capacity - dysprosium, terbium and yttrium being particularly critical and difficult to source elsewhere.

The technical reality is stark: replacing these supply chains isn't simply about finding alternative mines. The processing complexity for separating heavy rare earths requires sophisticated facilities that currently exist primarily within China. NioCorp's Nebraska project gains massive strategic importance as one of the few Western developments potentially capable of producing these elements domestically.

Beyond defense applications, these restricted elements are essential for electric vehicle motors, wind turbines, and numerous high-tech applications. The market disruption will likely drive pricing premiums as manufacturers scramble to secure non-Chinese sources.

While NioCorp's project remains in development stage, this geopolitical shift significantly enhances its economic profile and development timeline. Expect accelerated permitting, potential Defense Production Act support, and increased investor interest in rare earth projects. The Nebraska location provides a critical geographic advantage for domestic supply chains.

This restriction fundamentally changes rare earth market dynamics by forcing Western nations to develop redundant supply chains regardless of cost - creating price support and security premiums for producers outside China's sphere of influence. NioCorp stands to benefit substantially from this structural market shift.

CENTENNIAL, CO / ACCESS Newswire / April 4, 2025 / China retaliated today against the U.S. and allied nations by restricting the export of highly strategic Chinese-made rare earths, critical minerals that are needed in virtually all U.S. defense systems and across the electronics, manufacturing, high-technology, transportation, and energy sectors. The implications for U.S. national security are dire, according to NioCorp Developments Ltd. Executive Chairman and CEO Mark A. Smith ("NioCorp" or the "Company") (NASDAQ:NB).

"This is a precision strike by China against Pentagon supply chains that enable our most powerful weapons and defense systems, from stealth fighters and precision-guided munitions to satellite systems and hypersonic weapons," according to Mr. Smith. "The U.S. has long known that it walks a fine line by relying so heavily on China for rare earths. With this new move, Beijing is jamming its fingers on the pressure points of American deterrence. These aren't just metals-they're bottleneck elements, and without them, much of the Pentagon's advanced hardware risks slipping from superiority to obsolescence."

Mr. Smith, a 40+ year mining and rare earth industry veteran, predicted such a move by China months ago and has been raising the alarm with U.S. national security officials. See https://www.foxnews.com/opinion/mine-baby-mine-us-needs-dig-deep-help-military

"This is not a mere supply chain hiccup, it's a geopolitical earthquake in slow motion. Every fighter jet delayed, every missile contract disrupted, every paused satellite payload becomes a ripple in America's strategic posture. And with Russia and China tightening coordination, this may mark the start of a material cold war fought not with tanks, but with export licenses and embargoes," he added.

The middle and heavy rare earths to which China will now restrict access are these: samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium. The restrictions, announced China's Ministry of Commerce and the General Administration of Customs, include metals, alloys, oxides, compounds, and related products of the targeted rare earths. The announcement can be seen here: https://www.mofcom.gov.cn/zwgk/zcfb/art/2025/art_9c2108ccaf754f22a34abab2fedaa944.html

NioCorp is developing a critical minerals project in Nebraska that is expected to produce the processed rare earths to which China now seeks to restrict U.S. access, as well as niobium, titanium, and scandium. More information on that project can be seen here: https://www.niocorp.com.

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FOR MORE INFORMATION:

Jim Sims, Corporate Communications Officer, NioCorp Developments Ltd., (720) 334-7066, jim.sims@niocorp.com

@NioCorp $NB #Niobium #Scandium #rareearth #neodymium #dysprosium #terbium #ElkCreek #EV #electricvehicle

ABOUT NIOCORP

NioCorp is developing a critical minerals project in Southeast Nebraska that will produce niobium, scandium, and titanium. The Company also is evaluating the potential to produce several rare earths from the Project. Niobium is used to produce specialty alloys as well as High Strength, Low Alloy ("HSLA") steel, which is a lighter, stronger steel used in automotive, structural, and pipeline applications. Scandium is a specialty metal that can be combined with Aluminum to make alloys with increased strength and improved corrosion resistance. Scandium is also a critical component of advanced solid oxide fuel cells. Titanium is used in various lightweight alloys and is a key component of pigments used in paper, paint and plastics and is also used for aerospace applications, armor, and medical implants. Magnetic rare earths, such as neodymium, praseodymium, terbium, and dysprosium are critical to the making of Neodymium-Iron-Boron ("NdFeB") magnets, which are used across a wide variety of defense and civilian applications.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of applicable Canadian securities laws. Forward-looking statements may include, but are not limited to, statements regarding the prospective impacts of Chinese export restrictions on U.S. national security and other economic sectors; NioCorp's expectation of producing niobium, scandium, and titanium, and the potential of producing rare earths, at the Elk Creek Project; and NioCorp's ability to secure sufficient project financing to complete construction of the Elk Creek Project and move it to commercial production. Forward-looking statements are typically identified by words such as "plan," "believe," "expect," "anticipate," "intend," "outlook," "estimate," "forecast," "project," "continue," "could," "may," "might," "possible," "potential," "predict," "should," "would" and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements are based on the current expectations of the management of NioCorp and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated. Forward-looking statements reflect material expectations and assumptions, including, without limitation, expectations and assumptions relating to: NioCorp's ability to receive sufficient project financing for the construction of the Elk Creek Project on acceptable terms or at all; our ability to service our existing debt and meet the payment obligations thereunder; the future price of metals; the stability of the financial and capital markets; and current estimates and assumptions regarding the business combination with GX Acquisition Corp. II (the "Business Combination") and the standby equity purchase agreement (the "Yorkville Equity Facility Financing Agreement" and, together with the Business Combination, the "Transactions") with YA II PN, Ltd., an investment fund managed by Yorkville Advisors Global, LP, and their benefits. Such expectations and assumptions are inherently subject to uncertainties and contingencies regarding future events and, as such, are subject to change. Forward-looking statements involve a number of risks, uncertainties or other factors that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those discussed and identified in public filings made by NioCorp with the U.S. Securities and Exchange Commission and with the applicable Canadian securities regulatory authorities and the following: NioCorp's ability to use the net proceeds of the Private Placement in a manner that will increase the value of shareholders' investment; NioCorp's ability to operate as a going concern; NioCorp's requirement of significant additional capital; NioCorp's ability to receive sufficient project financing for the construction of the Elk Creek Project on acceptable terms or at all; NioCorp's ability to receive a final commitment of financing from the Export-Import Bank of the United States on an acceptable timeline, on acceptable terms, or at all; NioCorp's ability to recognize the anticipated benefits of the Transactions, including NioCorp's ability to access the full amount of the expected net proceeds under the Yorkville Equity Facility Financing Agreement; NioCorp's ability to continue to meet the listing standards of Nasdaq; risks relating to NioCorp's common shares, including price volatility, lack of dividend payments and dilution or the perception of the likelihood of any of the foregoing; the extent to which NioCorp's level of indebtedness and/or the terms contained in agreements governing NioCorp's indebtedness or the Yorkville Equity Facility Financing Agreement may impair NioCorp's ability to obtain additional financing; covenants contained in agreements with NioCorp's secured creditors that may affect its assets; NioCorp's limited operating history; NioCorp's history of losses; the material weaknesses in NioCorp's internal control over financial reporting, NioCorp's efforts to remediate such material weaknesses and the timing of remediation; the possibility that NioCorp may qualify as a passive foreign investment company under the U.S. Internal Revenue Code of 1986, as amended (the "Code"); the potential that the Transactions could result in NioCorp becoming subject to materially adverse U.S. federal income tax consequences as a result of the application of Section 7874 and related sections of the Code; cost increases for NioCorp's exploration and, if warranted, development projects; a disruption in, or failure of, NioCorp's information technology systems, including those related to cybersecurity; equipment and supply shortages; variations in the market demand for, and prices of, niobium, scandium, titanium and rare earth products; current and future offtake agreements, joint ventures, and partnerships; NioCorp's ability to attract qualified management; estimates of mineral resources and reserves; mineral exploration and production activities; feasibility study results; the results of metallurgical testing; the results of technological research; changes in demand for and price of commodities (such as fuel and electricity) and currencies; competition in the mining industry; changes or disruptions in the securities markets; legislative, political or economic developments, including changes in federal and/or state laws that may significantly affect the mining industry; the impacts of climate change, as well as actions taken or required by governments related to strengthening resilience in the face of potential impacts from climate change; the need to obtain permits and comply with laws and regulations and other regulatory requirements; the timing and reliability of sampling and assay data; the possibility that actual results of work may differ from projections/expectations or may not realize the perceived potential of NioCorp's projects; risks of accidents, equipment breakdowns, and labor disputes or other unanticipated difficulties or interruptions; the possibility of cost overruns or unanticipated expenses in development programs; operating or technical difficulties in connection with exploration, mining, or development activities; management of the water balance at the Elk Creek Project site; land reclamation requirements related to the Elk Creek Project; the speculative nature of mineral exploration and development, including the risks of diminishing quantities of grades of reserves and resources; claims on the title to NioCorp's properties; potential future litigation; and NioCorp's lack of insurance covering all of NioCorp's operations.

Should one or more of these risks or uncertainties materialize or should any of the assumptions made by the management of NioCorp prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.

All subsequent written and oral forward-looking statements concerning the matters addressed herein and attributable to NioCorp or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to herein. Except to the extent required by applicable law or regulation, NioCorp undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated events.

SOURCE: NioCorp Developments Ltd.

View the original press release on ACCESS Newswire

FAQ

What rare earth elements are affected by China's new export restrictions?

China's restrictions affect samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium, including their metals, alloys, oxides, and compounds.

How does China's rare earth restriction impact NioCorp (NB) business outlook?

The restrictions potentially strengthen NioCorp's market position as its Nebraska project aims to produce these restricted rare earths, offering a non-Chinese supply alternative.

What U.S. defense systems are affected by China's rare earth export restrictions?

The restrictions impact stealth fighters, precision-guided munitions, satellite systems, and hypersonic weapons that rely on these rare earth elements.

What is NioCorp's (NB) strategy to address the rare earth supply chain crisis?

NioCorp is developing a critical minerals project in Nebraska to produce the restricted rare earths, along with niobium, titanium, and scandium.

How will China's rare earth restrictions affect U.S. national security?

The restrictions threaten U.S. defense capabilities by potentially limiting access to materials important for advanced military hardware and weapons systems.