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China Bans Export of Tech Used To Extract Rare Earth Minerals

New restrictions could increase Chinese Dominance of EV battery production


China Bans Export of Tech Used To Extract Rare Earth Minerals

China has announced it is banning the export of technology to extract and separate rare earth metals.


The new restrictions come as China, which is now the world’s dominant force in extracting rare earth elements, continues to advance its global supremacy in this sector.


Many nations around the world have set ambitious goals related to a reduction in the use of fossil fuels, most with target dates between 2030 and 2040.


A key part of these strategies is scaling the use of electric vehicles and other devices currently reliant on fossil fuels.


Other countries like the U.S., Japan, and France have separation technology, but China has the best efficient and cost advantage, an analyst speaking on condition of anonymity told Reuters.


China restricting extraction technology could help it consolidate power and crowd others out of this competitive market.


Inside nearly every electric vehicle is a lithium-ion battery that relies on other minerals to power it. Rare earth minerals are also used in wind turbines, phone screens, hard drives, trains, and in an array of military weaponry.


"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.


Limited availability of the rare earth metals needed to build EV batteries has been considered by some to be a U.S. national security threat, according to a 2022 congressional report.


China, by contrast, says its new restrictions capping export of rare earth mineral extraction technology is to safeguard its “national economic security and development interests.”


EV batteries “depend on five critical minerals whose domestic supply is potentially at risk for disruption: lithium, cobalt, manganese, nickel, and graphite. The U.S. Geological Survey designated these and other minerals as ‘critical,’” the report states.


Currently, China produces 60 percent of the world’s rare earth elements and processes 85 percent of them.


Europe’s entire supply of rare earth minerals is mined in other countries, and more than 90 percent of the continent’s rare earth mineral supplies come from China. According to The Business Research Company, the rare earth mineral market is expected to grow from $5.72 billion in 2021 to $9.65 billion in 2026.

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