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US House committee report accuses China of manipulating

mineral

prices

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Report recommends price controls, US minerals stockpile

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Report says Hong Kong ownership makes LME susceptible to

Chinese

influence

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LME says its pricing is based on transparent trading

activity

By Ernest Scheyder and Pratima Desai

Nov 12 (Reuters) - China for decades has sought to

manipulate global critical minerals prices, using its control as

an economic weapon to expand its manufacturing sector and its

geopolitical influence, a U.S. House of Representatives

committee said on Wednesday.

The allegations, contained in a 50-page report from the

bipartisan U.S. House Select Committee on China and reviewed by

Reuters, adds to a series of missives from Washington

criticizing Beijing's sway in critical minerals markets.

President Donald Trump and his predecessor, Joe Biden, have

in recent years sought to crimp China's dominance in the

critical minerals sector.

COMMITTEE RECOMMENDATIONS INCLUDE MINERALS PRICE CONTROLS

The committee's legislative report aims to codify

presidential orders into law with an array of recommendations

including price controls and expanded government oversight of

price reporting agencies.

The Chinese Embassy in Washington did not immediately reply

to a request for comment. China has previously accused the U.S.

of distorting and exaggerating Beijing's rare earths export

controls and of stirring up panic over the issue.

"China has a loaded gun pointed at our economy, and we must

act quickly," said Congressman John Moolenaar, a Michigan

Republican and chair of the committee.

A chemist by training who previously worked at Dow Chemical

, Moolenaar added that Beijing's practices had "caused

American job losses, driven American miners out of business, and

jeopardized national security."

The report, compiled by committee staff, was also endorsed

by the ranking Democrat, Congressman Raja Krishnamoorthi of

Illinois.

It alleges that China's role as the world's largest

processor of many critical minerals has made it nearly

impossible for the United States and allies to determine the

true price of certain metals, including rare earths.

The report also suggests that the London Metal Exchange,

where many minerals are traded, is susceptible to influence from

Beijing, as it is owned by the Hong Kong Exchanges and Clearing ( HKXCF )

.

"The LME advertises itself as showing prices that 'properly

reflect global supply and demand.' However, with the (Chinese

government) looking over HKEC's shoulder, it is difficult to

determine whether the prices it publishes accurately reflect

global supply and demand."

The LME said it is subject to the laws and regulations

of the United Kingdom, where it is based.

"All of the LME's key prices are determined on the basis

of transparent trading activity from an international

participant base," a spokesperson said.

REPORT ALLEGES CHINA TARGETS PRICING OF RARE EARTHS

The House committee's report, based on published reports and

data, also alleges that China has specifically targeted the

lithium and rare earths industries, raising and lowering prices

to bolster its own economy.

"Each time lithium prices rose, the PRC government took

action to bring lithium prices back down," the report said.

The Trump administration cited issues with pricing in

September when it sought an equity stake in Lithium Americas ( LAC )

.

The report offers 13 policy recommendations, some of which

Trump has already taken. It also aims to spark broader dialogue

about China's presence in the minerals markets rather than seek

to address every concern.

"One single policy will not completely address the serious

challenge the United States faces on critical minerals, so we

must simultaneously pursue multiple policy prescriptions," it

said.

One of those recommendations, the creation of a "critical

minerals czar," was instituted by Trump earlier this year. The

report also suggests the creation of a U.S. minerals stockpile,

which the administration has indicated it is open to.