China bans export of rare earth processing tech over national security (updated)
21/12/2023 10:50
(Adds reaction from company in paragraphs 12 and 13, consultant
in paragraph four)
By Siyi Liu and Dominique Patton
BEIJING, Dec 21 (Reuters) - China, the world's top
processor of rare earths, banned the export of technology to
extract and separate the critical materials on Thursday, the
country's latest step to protect its dominance over several
strategic metals.
Rare earths are a group of 17 metals used to make magnets
that turn power into motion for use in electric vehicles, wind
turbines and electronics.
While Western countries are trying to launch their own rare
earth processing operations, the ban is expected to have the
biggest impact in so-called "heavy rare earths," used in
electric vehicle motors, medical devices and weaponry, where
China has a virtual monopoly on refining.
"This should be a clarion call that dependence on China in
any part of the value chain is not sustainable," said Nathan
Picarsic, co-founder of the geopolitical consulting firm Horizon
Advisory.
China's commerce ministry sought public opinion last
December on the potential move to add the technology to its
"Catalogue of Technologies Prohibited and Restricted from
Export."
It also banned the export of production technology for rare
earth metals and alloy materials as well as technology to
prepare some rare earth magnets.
The catalogue's stated aims include protecting national
security and public interest.
China has significantly tightened rules guiding exports of
several metals this year, in an escalating battle with the West
over control of critical minerals.
It introduced export permits for chipmaking materials
gallium and germanium in August, followed by similar
requirements for several types of graphite since Dec. 1.
WEST STRUGGLES
The move to protect its rare earth technology comes as
Europe and the United States scramble to wean themselves off
rare earths from China, which accounts for nearly 90% of global
refined output.
China has mastered the solvent extraction process to refine
the strategic minerals, which Western rare earth companies have
struggled to deploy due to technical complexities and pollution
concerns.
Ucore Rare Metals UCU.V said on Thursday that it had
finished commissioning of a demonstration plant to test its own
rare earths processing technology, which is being funded in part
by the U.S. Department of Defence.
"New technologies will be needed to outmaneuver the Chinese
grip on these important areas," said Ucore CEO Pat Ryan.
It is not clear to what extent China's rare earths
technology is actually being exported. Beijing has discouraged
its export for years, said Constantine Karayannopoulos, former
CEO of Neo Performance Materials NEO.TO , which separates rare
earths in Estonia.
"This announcement just formalises what everyone knew to be
the case," Karayannopoulos said. Neo owns its own technology for
rare earth separation, magnetics materials and magnet
manufacturing, he added.
Currently, China separates 99.9% of global heavy rare
earths, according to consultancy Benchmark Mineral Intelligence
(BMI). Most of the Western processing capacity being installed
is for "light" rare earths, including neodymium and praseodymium
(NdPr).
"Most likely, the impact of this ban will be in greater
difficulty in getting heavy rare earth separation capacity
online outside of China," said Daan De Jonge at BMI.
"You can have all the NdPr separated in Europe or the U.S.
as you want, but if you're still relying on dysprosium from
China, you're still very exposed to geopolitical shocks."
(Reporting by Siyi Liu, Dominique Patton and Beijing newsroom;
additional reporting by Eric Onstad in London and Ernest
Scheyder in Houston; editing by Toby Chopra, Jason Neely,
Kirsten Donovan, Tomasz Janowski and Jonathan Oatis)
((Siyi.Liu@thomsonreuters.com;))