China, the world's largest producer of rare earths, banned the export of technology to extract and separate the critical material on Thursday, the latest move by the country to protect its dominance over several strategic metals.
Rare earths are a group of 17 metals that are used to make magnets, convert electricity into motion, and are used in electric vehicles, wind turbines, and electronics.
While Western countries are trying to start their own rare earth processing operations, the ban is expected to have the biggest impact on so-called "heavy rare earths". Heavy rare earths are used in electric vehicle engines, medical equipment and equipment, and China has a near monopoly on smelting in these fields.
Nathan Picarsic, co-founder of geopolitical consultancy Horizon Advisory, said, "This should be a resounding call that relying on China in any part of the value chain is unsustainable." ”
In December last year, China's Ministry of Commerce solicited public comments on the possible inclusion of the technology in the "Catalogue of Prohibited and Restricted Surgical Procedures".
It also prohibits the export of technology for the production of rare earth metals and alloy materials, as well as the preparation of some rare earth magnets.
The stated objectives of this directory include the protection of *** and the public interest.
China has sharply tightened export guidance for several metals this year, and the battle with the West for control of critical minerals has escalated.
In August, China introduced export licenses for gallium and germanium, which are materials used to make chips, and since December 1, similar requirements have been imposed on several types of graphite.
The struggle of the West
At a time when Europe and the United States are scrambling to wean itself off China's rare earths, China has taken steps to protect its rare earth technology. China produces nearly 90% of the world's rare earths.
China has mastered the solvent extraction process to refine strategic minerals, while Western rare earth companies have struggled to adopt this process due to technical complexity and contamination issues.
Ucore Rare Metals said Thursday that it had completed a trial run of a demonstration plant, which was partly funded by the U.S. Department of Defense, to test its rare earth processing technology.
Pat Ryan, CEO of UCORE, said: "New technologies are needed to overcome China's dominance in these important areas.
It is unclear to what extent China's rare earth technology is actually exported. Constantine Karayannopoulos, the former chief executive of Neo Performance Materials, said Beijing had discouraged rare earth exports for years. The company separates rare earths in Estonia.
"This statement just formalizes what everyone knows," Karayanopoulos said. He added that NEO has its own technology in rare earth separation, magnetic materials and magnet manufacturing.
According to consulting firm Benchmark Mineral Intelligence (BMI), China is currently 99 percent separated globally9% heavy rare earths. Much of the processing capacity being built in the West is for "light" rare earths, including neodymium and praseodymium (NDPR).
"Most likely, the impact of this ban will make it more difficult to bring heavy rare earth separation capacity online outside of China," BMI's Daan de Jonge said.
You can separate all neodymium in Europe or the United States as much as you want, but if you still rely on dysprosium from China, you are still vulnerable to geopolitical shocks. ”