China Stops Exports of Some Rare-Earth Processing Technologies

The Chinese authorities decided to stop the export of several rare earth technologies.

China Stops Exports of Some Rare-Earth Processing Technologies

The media notes that the mentioned action by Beijing will intensify competition with Washington for global supplies of strategic raw materials. Also, this decision should be considered in the context of retaliatory measures against the decree of the United States to restrict the access of companies from an Asian country to advanced chips, including those necessary for the operation of artificial intelligence systems, and equipment for the production of microcircuits.

A document from the Ministry of Commerce of China indicates that local authorities have added the technology of making rare earth metals and rare earth magnets to the list of export restrictions. This technology cannot be supplied outside the Asian country.

The restriction of export activities can also be interpreted as a step partly due to the desire of many major geopolitical players to reduce the level of dependence on materials produced in China. Currently, this country is one of the largest suppliers of minerals in the world.

Over the past 30 years, China has achieved dominance in the mining and refining of rare earth elements. In this case, it means a cluster of 17 elements that are used in many industries, for example, in sphere production of electric vehicles and area making of wind turbines.

It should be clarified that the new export rules do not impose a ban on the supply of rare earth products themselves outside China. But at the same time, Beijing’s measures may provoke various setbacks in the development of the rare earth metals manufacturing industry in other countries.

The United States is currently making efforts to weaken China’s control over mineral flows. In this case, special attention is paid to rare earth elements such as lithium and cobalt. Legislative norms in the sphere of climate, developed by the administration of the current US President Joe Biden, have formed rules aimed at increasing the supply of minerals within the country or from allied states.

This year, China has already limited external supplies of gallium, germanium, and graphite, which are necessary for the semiconductor industry.

The media draws attention to the fact that there are very few factories in the world specializing in the refineries of rare earth elements. However, this state of affairs does not apply to China, where the corresponding production facilities are successfully operating. This means that local companies and researchers have a significant advantage in how to extract and process rare earth elements. Other countries do not have competitive experience in this sphere.

Last year, China’s share in the global structure of production of rare earth elements amounted to more than two-thirds. Data from the United States Government indicates that the Asian country still accounts for about 85% of the world’s refining capacity.

Also, China currently dominates the sphere of supply of rare earth magnets, which are the main products used in industrial goods.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.