China's rare earth export ban sparks global race for alternative technologies

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China's rare earth export ban sparks global race for alternative technologies

China's rare earth export ban sparks global race for alternative technologies

Industry News
Dec 25,23

Rare earths, a set of 17 metals essential for manufacturing magnets used in electric vehicles, wind turbines, and electronics, are at the centre of this geopolitical struggle.

China's rare earth export ban sparks global race for alternative technologies

China, the world's leading rare earth processor, has implemented a prohibition on the export of technology crucial for extracting and separating these vital materials. This move underscores China's commitment to maintaining its dominance in strategic metals. Rare earths, a set of 17 metals essential for manufacturing magnets used in electric vehicles, wind turbines, and electronics, are at the centre of this geopolitical struggle.

The impact of this export ban is anticipated to be most significant in "heavy rare earths," essential for electric vehicle motors, medical devices, and weaponry. China currently holds a near-monopoly on refining these critical materials, prompting concerns about overreliance on China in global supply chains.

Nathan Picarsic, co-founder of the geopolitical consulting firm Horizon Advisory, emphasised the need for diversification, stating that dependence on China at any stage of the value chain is unsustainable. China's commerce ministry had previously sought public opinion on adding this technology to its "Catalogue of Technologies Prohibited and Restricted from Export," citing national security and public interest as primary motivations.

As the West strives to establish its rare earth processing capabilities, China's tightened export regulations exacerbate the challenges. The ban covers production technology for rare earth metals, alloy materials, and certain rare earth magnets. This move follows a series of measures by China to control the export of critical minerals, including export permits for chipmaking materials such as gallium and germanium.

China's dominance in rare earths, accounting for nearly 90% of global refined output, has prompted Europe and the United States to seek alternatives. The race to secure alternative sources and technologies is evident, with companies like MP Materials and Ucore Rare Metals witnessing stock boosts following China's announcement.

Ucore CEO Pat Ryan emphasised the importance of developing new technologies to counter China's control over rare earths. The Western struggle to match China's expertise in solvent extraction, a key refinement process, is evident. China's separation of 99.9% of global heavy rare earths has created challenges for Western processing capacity, particularly for "heavy" variants crucial in various industries.

In light of China's export restrictions, the race to establish independent rare earth processing capabilities intensifies, driven by geopolitical and economic considerations.

Source: Money Control