China’s narrow grip on rare ground shows a small sign of weakness

China’s dominance of the global supply chain of rare land will not easily diminish, even if Beijing decides to agree to more export licenses through deals with Europe and the United States

three Chinese companies listed in Shenzhen He said this month Beijing agreed to their exports From the magnet with rare ground – the minerals are crucial for cars, defense, semi -conductors and other industrial products. But another company, Poto Inst, new magnetic materials, said last month export licenses It can only be used for one shipment.

In Europe, the auto groups said, in the case of magnets and rare heavy land, long -term export licenses were only valid for a maximum of six months.

The diversity is likely to be far from the Chinese sources of the rare land “very difficult”, and at best, a long -term limited solution, according to a memorandum on Tuesday from Rico Loman, an economist in the first sector of transport and logistics at the Dutch Bank.

China is the undisputed leader for the critical metal supply chain, production Nearly 60 % of the world’s supplies for rare land and He treats Nearly 90 %, which means that they import these materials from other countries and improve them.

“Europe currently does not produce any rare land, and the United States has not only started a small production of nodimum and Pressodymium. However, both regions only carry part of global reserves, which limits their ability to expand,” said Loman.

Indeed, European auto manufacturers and high -tech companies in China have Stop production or warn of shortage This summer.

China has announced the export controls on Seven rare land in early AprilAfter a series of most strict restrictions in the past two years, a wide range of critical minerals. Washington was It is expected that it will retract the controls in April Once the United States and China agreed to a 90 -day tariff in mid -May. After trade talks in London this week, US officials indicated that Beijing will soon allow the export of more Earth exports.

China has approved a “certain number” of export permits for rare Earth elements and relevant elements, A spokesman for the Ministry of Commerce said on ThursdayAdding that China will continue to increase the examination and agree to these licensing requests.

This did not greatly improve working conditions.

Philip Kirin, CEO of the Belgian Group of Chemicals, said, which runs the largest rare land photography factory outside China in La Roshil, France, which runs the largest rare land photography factory outside China in La Roshil, France, which runs the largest rare land processing factory outside China in La Roshil, France, which runs the largest rare land treatment factory outside China in La Roshil, France is that the market is still “volatile” even yet Commercial negotiations of the United States China in London.

In response to this inability to predict, he said that the company uses recycled materials and studying alternatives to the sources of China.

“This is the way we adapt to the current unpredictable situation and I think the best mitigation in this type of circumstances is actually mastery of technology,” Kirin said. Solvay aims to save 30 % of the rare land demand in Europe for permanent magnet by 2030.

This is easier than doing, as China has created control of huge amounts of global supply chains. In batteries, for example, China took advantage of 68 % graphite There is needed, 60 % of the world of lithium and 72 % of the cobalt used globally, according to the US Congress report citing data from 2019.

In a sign of the challenge facing international companies to get rid of dependence on rare Chinese land supplies, many auto manufacturers, Including General Motors and BMW The main suppliers have developed electric cars with a little or rare content. Few managed to expand production to levels that can reduce costs.

Lee Xing, an independent automaker in China, said that car manufacturers will have to “operate two environmental systems: one exclusively for China in China, and one outside China.”

Separately, Luis Black, CEO of Almonty Industries, said it would take a “great time” to find alternatives to China’s rare land.

Talk to CNBC’sSquawk box asia“On Friday, Black said that China may protect its market share by raising prices to the levels in which other countries’ companies have been out of work and investors have not been stimulated on capital.

Late last year, China increased restrictions on civil products exports that are likely to end with military use. The rules are not limited by the geographical location, which means that they can cover any Chinese transaction with a foreign entity or an individual Law Office Morrison Forster.

In February, China then announced the export controls on five Critical minerals, including tungstenA very solid metal is used for fine cutting tools, weapons and the production of semiconductor. Country 80 % of the Tungsten supply chain controls.

Last week, Oliver Klainhemel, CEO of EQ Resources, who says it is one of the best tungsten recycling companies, said that a European company needs tungsten powder for a week.

He warned against a “complete structural transformation” if the western companies that consume tungsten are forced to close, stimulating their Chinese peers to take this share in the market.

Almonty Industries reopens a large tungsten mine this year in South Korea, but the company expects its metal supply be able to satisfy the needs of the US defense and South Korea.

Black said: “This would always happen, and this was an inevitable matter, and it was not the surprise of anyone until that happened, then everyone (question) was:” What do we do? He said he hoped that the company’s tungsten laboratory will make progress in the next two years to restore more minerals from waste currently lost in production.