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The minors are seen in the Bayan Obo mine containing minerals of rare earths, in interior Mongolia, in China, on July 16, 2011.
Stringer | Reuters
China domination of the rare world supply chain will not easily decrease, even if Beijing decides to approve more export licenses thanks to agreements with Europe and the United States
Three Chinese companies listed in Shenzhen This month said that Beijing approved their exports Magnets with rare earths – critical metals for cars, defense, semiconductors and other industrial products. But another company, Baotou Inte Magnetic New Materials, said last month that export is licensed can only be used for a shipping.
In Europe, groups in the automotive industry have said that, in the case of heavy rare magnets, long -term export licenses from China were only valid for a maximum of six months.
The diversification of the Chinese supply of rare land is probably “extremely difficult” and, at best, a limited long -term solution, according to a note Tuesday by Rico Luman, economist main sector for transport and logistics at Dutch Bank ING.
China is the undisputed leader in the critical mineral supply chain, production Approximately 60% of the global supply of rare land and treatment Almost 90%, which means that these materials in other countries are important and refine them.
“Europe currently does not produce rare earths, and the United States only recently started production on a small-scale neodymium and Praseodymium. However, the two regions only have a fraction of global reserves, limiting their ability to develop,” said Luman.
Already, European car manufacturers and US high -tech companies in China have interrupted the production or warned of a shortage This summer.
China has announced export checks on Seven rare lands in early AprilFollowing a series of stricter restrictions in the past two years on a wide range of critical minerals. Washington had expected a decline in April orders Once the United States and China have accepted a suspended 90-day price in mid-May. After trade negotiations in London this week, US officials said Beijing will soon allow rarer exports of land.
China has approved “a certain number” of export permits for rare earth elements and related elements, A spokesman for the Ministry of Commerce said ThursdayAdding that China will continue to intensify the examination and approval of these license applications.
This has not yet improved commercial conditions.
The company logo is above the head office of Solvay SA in Brussels, Belgium, Monday, October 7, 2013.
Bloomberg | Bloomberg | Getty images
The market remains “volatile” even after the American-Chinese commercial negotiations in London, said Philippe Kehren, CEO of the Belgian Chemicals Group Solvay, who operates the largest rare land processing factory outside of China in La Rochelle, in France.
In response to this unpredictability, he declared that the company uses recycled materials and studies the alternatives of supply to China.
“This is how we adapt to the current and unpredictable situation and I think that the best attenuation of this type of circumstances is indeed to master the technology,” said Kehren. Solvay aims to provide 30% of the demand for rare land transformed into Europe of permanent magnets by 2030.
Half rollback
Beijing will probably maintain its restrictions on rare earths to dissuade Washington from resuming restrictions on high -tech exports to China, said Dennis Wilder, a former senior Intelligence of the White House.
“If new export controls [against China] are implemented, China can withdraw from the understanding of rare earths, “said Wilder.
Workers carrying soils containing rare earth elements for export to a port of Lianyungang, Jiangsu province, China, October 31, 2010.
Stringer | Reuters
Gabriel Wildau, managing director at Risk Consultancy Teneo, has echoed and warned that even if Beijing has reported a desire to facilitate exports of rare earths, “supply cuts will remain an omnipresent threat”.
Beijing made the “permanent” license regime, despite the perception that it was an “act of reprisals” in the midst of a climbing of tit-range with the United States, noted Wildau. This would allow China to discourage the storage of the critical mineral by American companies and to ensure that its leveraging effect is not reduced, he added.
Change of structure
“Companies have no choice but to invest and develop alternative alternative sources, substitutes and solutions to hide against the risk of loss of supply of China,” said Mattken Mattken, Vice-President of BCA Research.
It is easier to say than to do, because China has reinforced the control of large quantities of world supply chains. In batteries, for example, China extracted 68% of the graphite Necessary, refined 60% of world lithium and 72% of the cobalt used worldwide, according to a report by the US Congress citing data from 2019.
In a sign of the challenge for global companies to get rid of dependence on rare Chinese supplies, several car manufacturers, including General Motors and BMW And the main suppliers have developed electric vehicles with little or no rare lands content. Few have managed to evolve production at levels that could reduce costs.
A logo outside the BMW AG exhibition hall in Madrid, Spain, Friday March 28, 2025.
Bloomberg | Bloomberg | Getty images
Car manufacturers will have to “exploit two ecosystems: one exclusively for China in China and one outside of China,” said Lei Xing, independent analyst on the Chinese automotive industry.
In addition, Lewis Black, CEO of Almonty Industries, said that he would take “a large time” to find alternatives to the supply of China to rare land.
Speaking to CNBC “Squawk Box Asia“Friday, Black said that China had protected its market share by lowering prices to levels to which companies in other countries were bankrupt and that investors were not encouraged to pay capital.
At the end of last year, China increased restrictions on exports of civil use products considered to end up having military use. The rules are not delimited by the geographical situation, which means that they could cover any Chinese transaction with a foreign entity or an individual, underlined Law firm Morrison Foerster.
In February, China then announced export checks out of five critical minerals, including tungstenAn extremely hard metal used for precision cutting tools, weapons and the production of semiconductors. The country Control 80% of the tungsten supply chain.
Last week, a European company that needs the tungsten powder closed for a week, said Oliver Kleinhempel, executive director of EQ Resources, who claims that it is one of the two main Tungsten recycling companies.
He warned against a “complete structural change” if Western companies that consume tungsten are forced to close, encouraging their Chinese peers to take this market share.
Almonty Industries strives to reopen a large tungsten mine this year in South Korea, but the company expects its metal supply to be able to satisfy us, the EU and the South Korean defense needs.
“It was always going to happen, it was inevitable, it was not something that surprised someone by surprise until it happened, then everyone[‘s question] Was: “What are we doing?” “Said Black. He said he hoped that the company’s tungsten laboratory could progress over the next two years to recover more metal from residues currently wasted in production.
