*

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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LME says its pricing is based on transparent trading

activity

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Chinese embassy in DC says 'nothing credible' about

committee

(Adds statement from Chinese embassy in paragraphs six and

seven of Nov. 12 item)

By Ernest Scheyder and Pratima Desai

Nov 12 (Reuters) - China has sought to manipulate global

critical minerals prices for decades, 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, add 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.

In a statement to Reuters, the Chinese Embassy in Washington

said "there is nothing credible about the committee," adding

that China is committed to "upholding the security and stability

of global production and supply chains."

"We hope the relevant U.S. politicians view China in an

objective and reasonable light, proceed from the common

interests of China and the U.S., head toward the same direction

with China and promote the development of the China-U.S.

relations based on mutual respect, peaceful coexistence and

win-win cooperation," said spokesperson Liu Pengyu.

China had 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.