The Duran Podcast - Rare Earths and Drones: China Is Squeezing the West

Episode Date: August 9, 2026

Rare Earths and Drones: China Is Squeezing the West

All right, Alexander, let's talk about what is happening with Chinese exports of rare earths and also of drone components. It looks like China is finally restricting the rare earths and the drone parts, something we discussed in a video, I want to say two, three weeks ago. Yeah. And it looks like China is now moving forward with restricting the components that are being used by the collective West in order to strike at Russia as well as the rare earths that go into almost all of the weapons that the collective West manufacturers in order to

not only strike at Russia, but eventually to go after China when and if there is an eventual when and if there is a war with China over Taiwan, which is something that many analysts suspect will happen by around 2030, give or take. Anyway, your thoughts? This is a very, very big story and it is going very under, it's been very under reported. In fact, the only media outlet that I see it reporting it, reporting on it is the Financial Times. And they're doing it in a very, very careful way. Anyway, about two or three weeks ago, as we discussed, we had a long article in the Financial Times, which acknowledged that the Chinese, for some time now, since last year in fact, have had a licensing system in place in relation to purchases of rare earths.

So if you're a Western company, you have to go to China, complete incredibly complicated questionnaires and goes through extremely tough due diligence with the Chinese. And you have to explain exactly what you're going to use any rare earths that you buy from China for. And you have to give categorical commitments that you are not going to use these rare earths or that these rare earths that the Chinese give you are not going to be used for military production. And apparently this has been steadily tightened over the course of the last year. And we are now starting to get clear signs that. there are stresses as a result in the military production system and in Western stoppiles.

The article that I mentioned in the Financial Times was already talking about panic and hysteria on the part of some Western buyers of Reras. It didn't actually discuss military companies, military production companies, but one suspects that they're having even bigger problems. And you remember last year, I think, or early this year, there were stories about the fact that F-35s are flying with counterweights in their noses where the radars are supposed to be and that there's been delays in producing the radars. Well, it looks as if what the problem is, is that these are more advanced radars

than the ones that the older F-35s previously have. These are radars which apparently depend on gallium arsenide, which I believe, by the way, is not a rare earth, but which is also mostly, almost entirely produced and exported by China. The Chinese are restricting exports. There is a shortage of this particular metal. And the result is that they're not able to produce the radar sets for the F-35s.

Sonar 21, by the way, has a good piece about this. So you're starting to see this having a cascade effect. And the Financial Times has now written a piece in which we learn that the United States government is now imposing restrictions on the export of used tungsten, another one of these metals, which is not a rare earth, but at which China, again, is the overwhelming and most important supplier. So used tungsten and certain other materials that the United States is restricting their export now, or rather prohibiting their export, so that they can also be recycled within the industrial system. So that, with a military industrial system. And tungsten again is apparently essential for producing missiles and rockets and such other. types of weapon systems. So you can see that this is starting to have an effect on military

production in the United States. It's not been talked about very much. Sooner or later, if these restrictions remain in place, I suspect we're going to see high-end production of civilian goods also affected because some of them also use these materials. But we see where this game of sanctions and counter-sanctions that the United States embarked on some years ago is now taking us to. Trump is going to discuss all of this with Xi, right? Yeah. When they meet.

Well, indeed, yes. But he presumably also discussed this with Zee when they met in, was it Hong Kong or was it Korea? Korea. It was in Korea. And then he also apparently discussed this. We see when they met in Beijing and we see that nothing has changed. In fact, the Chinese are tightening controls.

And we did a program a short while ago in which we discussed how the Ukrainian drone offensive against Russia depends on Chinese-produced drone components. that basically what happens is that the Chinese make the components. They export them to third parties. The third parties then export them to Europe. They're all screwed together, mostly in Europe. They then send to Ukraine. The Ukrainians put some finishing charges and used the drones.

And that the Russians have been complaining about this to the Chinese for at least a year. and up to now nothing has happened. And we said in the program that we did that eventually the Chinese would start to take steps. And we now learn that they are taking steps. They've just announced counters sanctions against the United States. They are setting up an identical licensing system in terms of drone export, drone component exports to the United States, including through third parties, I understand, which means detailed questionnaires, due diligence,

explanations of what all this is for. At the moment, this is the United States only, whereas the drone components that we are talking about are the ones that the Ukrainians used are going to Europe. But of course, this is a test run. Sooner or later, very soon, I expect, in fact. The Chinese are going to extend this regime to drone component exports to Europe as well. I expect that's going to happen within the next few months.

Boy, we were ahead on this one. The whole droves to China. That was quite a controversial video, actually. That was a very controversial video. And we got all sorts of people, by the way, writing to tell us that the Chinese couldn't do this. that this is impossible. And we said it's absolutely possible. And now it is officially confirmed

that the Chinese are imposing licenses and setting up the identical sort of regime with rare earths about drone components. And why? Because obviously, they understand that drone components are now ending up within Western military supply check. They knew.

They knew for many years, and the Russians were telling them, yes. Exactly. The pressure just got too great and they had to do something. Exactly. And they watched the Duran video. Quite plausible. How does this affect Ukraine?

How does this affect the collective West and the whole drone war against Russia? I mean, you can't get the components from China. You can't make the drones. Well, that's exactly. I'm going to make a speculation here. I suspect before very long, you're going to see the Ukraine. drone offensive suddenly, you know, we see a thousand drones a night and then it's going to fall suddenly and dramatically from a thousand drones a night to perhaps 100, 100 or 50 or something

of that kind. Firstly, I suspect that what happened is that Ukraine and the Europeans have been busy manufacturing drones for many, many months before. the drone offensive began. I don't believe that they make a thousand airplane-sized drones, you know, every day or anything of that kind. I think this has been going on for a long time. They built up a stoppile. The stoppile is probably already significantly depleted anyway. It's depended, as we've discussed, on imports of Chinese components. These are, going to become increasingly restricted and difficult to obtain. And as I said, I suspect at some point we're suddenly going to see this whole drone offensive. We're going to see the output,

the production simply implode. And to repeat, the Europeans and the Americans, especially the Europeans, the Europeans, even more than the Americans, cannot produce these drones at cost. at the kind of costs that make 1,000 drones a night effective, based on their own materials and technology. What will happen if they can't use Chinese components, which are cheap, they will have to use European ones, and the costs are going to balloon. So they won't be able to sustain these levels of production. We've seen this with artillery shell production,

and we're going to see this with drones as well. All right, we will end the video there. The durand.locos.com. We're on X, we're on Rumba, we're on telegram. We're also on Substack. Go to the Duran Shop, pick up some merch. We have a summer sale going on the Duran Shop. So all those links will be in the description box down below.

Take care.