China, the world's largest processor of rare earths, banned the export of technologies for extracting and separating rare earths on Thursday to protect its dominance over several strategic metals.
Rare earths are made up of 17 metals and are used to make magnets that convert magnetic force into power and can be used in electric vehicles, wind turbines, and electronics. While Western countries are trying to kickstart their own rare earth processing operations, the ban is expected to impose a ban on the so-called"Heavy rare earths"To have the greatest impact, these rare earths are used in electric vehicle motors, medical equipment and equipment, and China has a near monopoly on the refining of these rare earths.
China's Ministry of Commerce solicited public comments in December on measures to potentially include the technology in the Catalogue of Prohibited and Restricted Technologies, which also prohibits the export of technology for the production of rare earth metals and alloys, as well as the preparation of certain rare earth magnets.
The stated objectives of the Directory, including the protection of *** and the public interest.
In its battle with Western countries for control of critical minerals, China has sharply tightened export rules for several metals this year. In August, China imposed export licenses for gallium and germanium, which are materials used in chip manufacturing, and since December 1, it has imposed similar requirements on several types of graphite.
Don Swartz, CEO of U.S. Rare Earths Corporation, which is developing rare earth mining and processing facilities in Wyoming, said"China is struggling to maintain its market dominance, and now it's a race. "
China's efforts to protect rare earth technology come at a time when Europe and the United States are scrambling to rid itself of rare earths from China, which produces nearly 90% of the world's refined rare earths.
China has mastered the solvent extraction process for refining strategic minerals, which MP Materials and other Western rare earth companies have struggled to adopt due to technical complexity and contamination issues.
Shares of MP companies, which have begun to slowly ramp up processing of rare earths in California after the move in China, jumped more than 10 percent on Thursday.
Ucore Rare Metals said on Thursday it had completed a trial run of a facility to test its rare earth processing technology. CEO Pat Ryan said:"In order to break free from China's control in these important areas, new technologies must be adopted. "
Ucore's share price is up more than 16%.
It is unclear how much China actually exports rare earth technology. Konstantin Karayanopoulos, former CEO of Neo Performance Materials, who isolated rare earths in Estonia, said China had discouraged the export of rare earths for many years"This announcement only formalizes the facts that are known to all. "
According to consulting firm Benchmark Mineral Intelligence (BMI), China separates 99 percent of the world9% heavy rare earths. Most of the processing capacity that is being installed in the West is used for:"Light"Rare earths, including neodymium and praseodymium.
BMI's Daan de Jonge said:"Most likely, the impact of this ban will make it more difficult to bring heavy rare earth separation capacity online outside of China. You can separate all the neodymium and praseodymium in Europe or the United States as much as you want, but if you still rely on dysprosium (heavy rare earths) from China, then you are still vulnerable to geopolitical shocks. "