On July 16, 2011, miners were seen in the Bayan Obo mine containing rare earth minerals in Inner Mongolia, China.
Reuters
China’s dominance over global rare earth supply chains is not easy to diminish, even as Beijing decides to approve more export licenses through deals with Europe and the United States
three Chinese companies listed in Shenzhen Say this month Beijing approved their exports Magnets with rare earths – Metals are crucial to automobiles, defenses, semiconductors and other industrial products. But another company, Baotou Inst Magnetic New Materials, said last month that it exports licenses Only used for one transportation.
In Europe, automotive industry groups say that long-term export licenses from China are only valid for up to six months in terms of magnets and heavy land.
Diversification from rare earth procurement in China can be “extremely difficult” and at best a limited long-term solution, according to a note by Rico Luman, senior economist at the Dutch Bank ING Transportation and Logistics.
China is the undisputed leader in key mineral supply chains. Production About 60% of the rare earths are available in the world Processing Almost 90%, which means it is importing these materials from other countries and perfecting them.
“There is no rare earth production in Europe at present, and the United States has only recently begun small-scale production of new mountain and praseodymium. However, these two regions account for only a small fraction of global reserves, limiting their ability to scale up,” Luman said.
Chinese European automakers and U.S. high-tech businesses have already Stop production or warn of shortages This summer.
China announces export control Seven rare earths in early AprilOver the past two years, a series of stricter restrictions have been imposed on a wide range of critical minerals. There is A rollback expected in April Once the United States and China agree to a 90-day tariff probation in mid-May. After trade talks in London this week, U.S. officials said Beijing will soon allow more rare earth exports.
China has approved a “certain quantity” export license for rare earth elements and related projects. A spokesman for the Ministry of Commerce said Thursdayadding that China will continue to strengthen inspections and approval of such license applications.
This has not significantly improved the business situation.
The company’s logo is located on Monday, October 7, 2013 at the Solvay SA headquarters in Brussels, Belgium.
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Philippe Kehren, CEO of Belgian chemical group Solvay, said the market was still “volatile” even after the United States-China trade negotiations in London.
To cope with this unpredictability, he said the company is using recycled materials and researching procurement alternatives in China.
“That’s how we adapt to the current unpredictable situation, and I think the best mitigation in this case is really to master the technology,” Kehren said. Solvay’s aim is to supply 30% of the demand for processing in Europe by 2030.
Half heart rollback
Dennis Wilder, a senior White House intelligence official, said Beijing could continue to limit the rare earth to prevent Washington from increasing restrictions on China’s high-tech exports.
“If new export controls are implemented (for China), China may retreat from the understanding of the rare earth,” Wilder said.
On October 31, 2010, soil containing rare earth elements was transported at a port in Lianyungang, Jiangsu Province, China.
Reuters
Gabriel Wildau, managing director of risk consulting firm Teneo, responded to this view, warning that even if Beijing expressed its willingness to mitigate rare earth exports, “the supply cutoff remains a permanent threat.”
Wilton pointed out that Beijing has set the licensing system “permanent” as “permanent”, although people think it is an escalation with the United States, which is “an act of revenge.” He added that this will allow China to block U.S. companies’ inventory of key minerals and ensure that their negotiation leverage remains unreduced.
Structural transfer
“Now, companies have no choice but to invest in and develop alternative sources, alternatives and reexport solutions to resist the risk of supply losses in China,” said Matt Gertken, senior vice president of BCA Research BCA Research.
This is easier said than done, because China has established control over a large number of global supply chains. For example, in a battery China has mined 68% of graphite According to a report in the U.S. Congress, what is needed is that 60% of lithium and 72% of cobalt are used worldwide.
To help global companies get rid of the challenge of relying on Chinese rare earths, several automakers, Including General Motors and BMW and major suppliers have been developing electric vehicles with almost no rare earth content. Few people are able to expand production to a level that can reduce costs.
Logo outside the BMW AG showroom in Madrid, Spain on Friday, March 28, 2025.
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Lei Xing, an independent analyst for the Chinese auto industry, said automakers will have to “operate two ecosystems: one in China, one in China, and one outside China.”
Almonty Industries CEO Lewis Black also said it would take “a lot of time” to find alternatives to China’s rare earth supply.
To CNBC’s “Asquawk Box Asia“On Friday, Black said China protected its market share by lowering prices to the level of companies in other countries’ collapses, and investors did not incentivize investment capital.
Late last year, China increased restrictions on exports of products for civilians who are believed to have potentially ultimately military uses. The rules are not subject to geographical location, which means they can cover any Chinese transactions with foreign entities or individuals, noting Law firm Morrison Foerster.
In February, China then announced five Key minerals, including tungstena very hard metal for precise cutting tools, weapons and semiconductor production. This country Control 80% of the tungsten supply chain.
Last week, a European company needed to shut down tungsten powder for a week, said Oliver Kleinhempel, executive director of EQ Resources.
He warned that “full structural shift” if Western businesses that consume tungsten are forced to close, motivating their Chinese counterparts to take up that market share.
Almonty Industries is working to reopen a large tungsten mine in South Korea, but the company expects its metal supply to meet only our, EU and South Korea’s defense needs.
“It always happens, it’s inevitable, until it happens, it’s not surprising anyone, and then everyone (the question) is: ‘What do we do?'” Black said. He said he hopes the company’s tungsten lab will make progress over the next two years to restore more metal from the current wasted production.
