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Shanghai — It was Beijing’s decision almost 30 years ago to make rare earths a strategic material, and ban foreigners from mining them, that helped pave the way for China to elbow aside the US as the world’s leading producer.

In the intervening period, as China tightened control of domestic output of rare earths — a broad group of 17 elements used in everything from electric vehicles to military hardware — the US all but surrendered to China’s dominance of the sector...

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