Surging rare-earth production in China is presenting a new challenge to budding efforts in the U.S. and elsewhere to undercut the Asian giant’s dominance in a market for exotic materials used in everything from smartphones to fighter jets.

China said this month it’s raising its annual mining quota for rare-earths to 132,000 tons, 10% above last year’s record high. It’s a move likely to weigh on global prices, dealing a blow to rivals including the U.S. and Australia, countries that agreed just last week to jointly accelerate new projects in a push to diversify the supply chain.

If you’re reading this story on a smartphone, you probably have China to thank for it. The Asian nation generates about 70% of mined rare earths and controls 90% of a $4 billion global market for materials used in magnets and motors that power phones, wind turbines, electric vehicles and military hardware.

With the U.S. and China locked in trade talks, there were fears China may restrict access to the materials. Instead, it is bulking up, potentially pushing companies elsewhere “into a tight cash situation” just as they seek to invest in new projects, said Ryan Castilloux, managing director at critical metals consultancy Adamas Intelligence.

In the U.S., that puts a target squarely on MP Materials, which runs America’s lone operating rare-earth mine, Mountain Pass in California. The site, which sits less than an hour’s drive from the gambling dens of Las Vegas, resumed sales last year after being mothballed in 2015.

This year, the company expects to double its output to more than 30,000 tons, or about 15% of the global total, according to a person familiar with the operation who asked not to be named because the information is proprietary.

Now that production is sent to China to be processed. By the end of next year, though, that could change, according to James Litinsky, chief executive officer of JHL Capital Group LLC, the majority owner of MP Materials.

The company is working to open its own processing center by then that should be able to handle all of the mine’s production, Litinsky said by telephone. That will allow it to directly market the materials to U.S. manufacturers.

“If people focus on the short-term supply issues, they miss the bigger picture,” Litinsky said. “Tens of millions of jobs and trillions of dollars of downstream GDP, that’s what the Chinese are after.”

What the U.S. wants is “a level playing field,“ Litinsky added. “We’re concerned China takes predatory actions with pricing and supply.”

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