China has been accused of “weaponising” its grip on the rare earth metals needed for wind turbines and electric cars amid reports it is preparing a ban on exports of key technology.
Beijing is reportedly drawing up plans to block exports of technology needed to process and magnetise the metals, raising the spectre of shortages in the West given China’s dominance in the market.
Jack Richardson, an associate fellow at the Council on Geostrategy, said: “The Government should be very concerned, China has a strong position in the global economy built up since the eighties. It is seeking to corner the market in clean tech as it does in other sectors like steel. We need to join the Americans, Japanese, and others, and work together to water down China’s leverage.”
Paul Atherley, Chairman of UK rare earths refinery developer Pensana, said: “This represents a seismic shift from China’s previous position and brings an outright export ban one step closer.”
China said they would never introduce export restrictions on rare earths after 2011. The announcement appears to be a clear warning of its willingness to weaponize its dominant position in rare earths.”
Brian Menell, chairman of critical-metals investor TechMet, said: “The fact that there is a prospect of them using this weapon is very disturbing. It indicates the rise of the assertive confidence of China on the global stage and their sense that they can play these games”
Rare earths are a group of metals such as neodymium and dysprosium with used in high-tech uses, such as for making the permanent magnets that help wind turbines run.
Despite the name, the metals are abundant in the earth. China dominates the market in producing and processing them into usable products, however.
Its move to restrict technology exports comes as rival countries attempt to cut their reliance on China’s supply chains, wary of any escalation of tensions over Taiwan.
Gareth Hatch, a rare earth elements expert and boss of Strategic Materials Advisory, said the restrictions threatened to hit American and European companies with specialist equipment on order from China, such as furnaces and presses used to make magnets.
He said: “It can be a nine, twelve, eighteen-month lead time when you are ordering this kind of equipment, because the companies that manufacture it don’t sell thousands – they are done to order.
So if there are folks who placed their orders a while ago and the kit is on its way on a boat or in a warehouse somewhere, there’s going to be some concern now. Anyone who is relying on Chinese hardware, that’s going to be an issue.”
A spokesman for the Department for Business and Trade said: “It’s vital we have a secure supply of critical minerals for UK businesses, and that is precisely what our Critical Minerals Strategy will do.
The UK has recently signed several critical mineral agreements with key countries, including Canada and Australia, and our accession to CPTPP will help improve the resilience of our supply chains further.
The Government will continue to stand up for UK businesses, working with our friends and allies around the world on issues where our interests align.’’
Pensana plc (LON:PRE) explores and mines neodymium, praseodymium, and rare earth minerals. The Company’s flagship assets are the Saltend rare earth refinery project in the United Kingdom and Longonjo neodymium and praseodymium (NdPr) Project in Angola.