(Bloomberg) — China may ban the export of rare-earths refining technology to countries or companies it deems as a threat on state security concerns, according to a person familiar with the matter.The Chinese government is currently conducting a review of its rare-earths policy. Officials view the technology needed to refine and purify the raw materials as a more powerful weapon in protecting state interests than the actual minerals, and is looking at banning sales of the technology to some countries or companies, according to the person, who asked not to be identified because the information isnt public.While China has no plans to restrict shipments of rare earths to the U.S., it is keeping the plan in its back pocket should a trade war break out again, the person said. The Asian nation is also exploring a ban on rare earths as part of its sanctions on some individual companies, including Lockheed Martin Corp., which violated Chinas core interest over arms sale to Taiwan, the person said.Chinas Ministry of Commerce didnt immediately respond to a fax seeking comment.Shares of MP Materials Corp., the lone U.S. rare-earths producer, closed 6.4% higher on Friday after earlier touching a record $46.84 in New York. The U.S. Defense Department in November awarded the company $9.6 million to fund processing and separation of light rare-earths at its Mountain Pass operations, a move that signals the nations aim to expand domestic production of the permanent magnets that make rare-earths so coveted.China controls most of the worlds mined output of rare earths, a broad group of 17 elements that are used in everything from smartphones to fighter jets, and has a stranglehold over processing. Its dominance would leave overseas industries with few avenues to immediately secure supply if curbs were to be put in place.The minerals have previously been touted as a possible weapon in the U.S.-China trade war, with Beijing readying a plan in 2019 to restrict shipments to hurt the American economy. The U.S. imports about 80% of its rare-earth compounds and metals from the Asian nation, according to government data.Those curbs were never adopted, though it spurred the U.S. and Europe to seek out ways to cut their reliance on a single supplier. While rare earths are relatively abundant, mine-able concentrations are less common than other ores and countries face hurdles including high costs and environmental concerns in setting up domestic industries.Read more: U.S., Europe Face Hurdles to Cut China Reliance for Rare EarthsDonald Trump last year signed an executive order aimed at expanding domestic output of rare-earth minerals, a year after the Department of Defense was ordered to spur the production of magnets. The U.S. has also been awarding contracts and signing investment agreements aimed at establishing its own processing capabilities.Earlier this week, the Financial Times reported that China is exploring whether it can hurt U.S. defense contractors by limiting supplies of rare-earth minerals that are critical to the industry.Meanwhile, China, which typically issues two batches of rare-earths mining quotas a year, boosted the first batch for 2021 to 84,000 tons, a 27% increase from last year, according to a statement from Ministry of Industry and Information Technology Friday. Last years total hit a record 140,000 tons as demand strengthened for the strategic materials.(Updates with MP Materials share move in fifth paragraph, Chinas quota in 11th paragrpah)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.