{"text":[[{"start":0,"text":"Defence contractors warned that a US initiative to stockpile critical minerals could drive up prices and unduly compete with industrial buyers for scarce materials."}],[{"start":0,"text":"The US government should “proceed with caution” to avoid distorting markets, the Aerospace Industries Association said in a report of its members’ views released on Thursday."}],[{"start":0,"text":"The US Export-Import Bank this year unveiled a $12bn plan, Project Vault, to build up a strategic domestic reserve of metals for civilian industries to draw on in times of shortage."}],[{"start":0,"text":"That comes in the context of an accelerating international race for resources and a trade war between the US and China that led Beijing to restrict access to a range of metals that are vital for modern technologies."}],[{"start":0,"text":"Members of the AIA were concerned about Project Vault “competing” with corporate buyers for critical minerals “amid an already constrained global supply, which could result in increased market prices and volatility for companies,” the industry body said."}],[{"start":68.32,"text":"The group, which counts Palantir Technologies and BAE Systems among its members, said it wanted Vault to address its concerns before it made any purchases and to better explain how the initiative would work."}],[{"start":80.6,"text":"Ex-Im Bank defended the project’s work. “Project Vault is a shock absorber for American manufacturers,” it said in a statement. “Project Vault was built to protect American production lines from supply shocks, not compete with the companies it serves.” The Pentagon declined to comment."}],[{"start":97.56,"text":"Metals including tungsten, prized for its hardness, and rare earth elements, which go into magnets, are key to defence supply chains. But prices have soared over the past two years as supplies have been squeezed by Beijing, which dominates their production."}],[{"start":112.813,"text":"The US and other nations are now racing to stand up alternative sources and build emergency stockpiles, efforts that could lead to increased competition between countries and sectors."}],[{"start":123.28,"text":"Spain’s Abenojar Tungsten told the FT it sold all the metal its mine will produce over its first decade of operations to trading house Traxys, which will supply Project Vault among other clients."}],[{"start":135.18,"text":"The AIA also warned its members would need more time to comply with a January 1 US deadline banning defence groups from sourcing rare earth magnets from China for the military."}],[{"start":145.44,"text":"The high-tech components go into everything from electric vehicles to fighter jets and weapons systems, and only a handful of companies outside China manufacture them at scale."}],[{"start":156.16,"text":"Waivers for non-compliant items would be “necessary beyond January 1” with the volume needed across the industry likely to be “significant”, said the AIA."}],[{"start":165.24,"text":"That would create an “administrative bottleneck” for the government unless a clear process was set up to deal with waiver applications, the group said. It was not currently clear in what circumstances a waiver would be approved, it added."}],[{"start":178,"text":"“It would be very difficult for the industry to bear not having any waivers at all, and I dare say it would be impossible,” said Dak Hardwick, vice-president of international affairs at the AIA. US President Donald Trump issued an executive order in July restricting the issuance of future waivers."}],[{"start":195.04,"text":"The defence industry is a key user of critical minerals and magnets, though the automotive and semiconductor industries are typically larger users. However, defence and aerospace companies often require high-purity materials and bespoke parts that are produced in less abundance."}],[{"start":210.52,"text":"Even if non-Chinese sources are available, suppliers of materials and components often need to go through a lengthy testing and approval process with potential buyers before their products are swapped into a supply chain."}],[{"start":227.84,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1791461023_8397.mp3"}