Science and Tech

China is already considering a critical measure for rare earths: ban the export of its magnet technology

Tweet By Gunter Erfurt

It is technology, but also and above all – paraphrasing that popular slogan from Bill Clinton’s ’92 campaign—it’s economics and a healthy dose of geopolitics. China is considering banning the export of certain key technologies for rare earth magnets. The news advances her nikkei and replies the Reuters agency. And if it finally goes from the field of plans to that of consummated politics, it would complicate the already jumbled global board a little more. China is decisive in the supply chain of the REEswhich gives it a valuable asset in the face of the restrictions with which the US is complicating its access to “made in USA” technology.

What does China value? And what would his decision entail?

not with my technology. That is, roughly speaking, the approach that would be on the table in Beijing. The newspaper Nikkei assures that the country is considering banning exports of certain technologies used in the production of high performance rare earth magnets. The reason: “national security.”

In addition to the context —marked by the tightness with Washington and the “war of chips”—and the overwhelming weight of China in the supply chain, the decision would be relevant for one fundamental reason: the use of those same magnets in electric cars or wind turbines, among other devices, would which gives them a prominent role both in the technology sector and in the green transition.

Reviewing the export catalog. Here’s the key. The Chinese authorities are updating the Catalog of Prohibited and Restricted Export Technologies, a document with strategic value that includes which resources must be subject to controls to cross the country’s borders. as required Japan Newsthe draft of the revised catalog added a ban on the export of high-performance magnet technologies with neodymium and samarium-cobalt.

Asian Financial goes a little further and specifies that in December 2022 officials from the Chinese ministries of Commerce and Technology announced a plan with more than 40 amendments or additions to the law. Among the provisions would be some that would “prohibit or limit exports of alloy technology to make high-performance magnets derived from rare earths.” The changes might not take too long: they could go into effect this year.

Surprise… halfway. At the end of 2022 the Ministry of Commerce posted a notice on the review, which already aroused the interest —and misgivings— of the sector. in january Bloomberg was advancing that Beijing was considering including relevant methods for the manufacture of solar panels on the list, a move with which it would try to shield its own industry and the position of dominance it has achieved. Over the past few years, China has managed to become a heavyweight in renewable energy installations. Inside and outside its borders.

Because it is important? For two big reasons. The first is the importance of rare earth magnets, especially in a technological scenario marked by decarbonization. They are used in electric cars, aviation, mobile phones… Their weight is significant enough that —swipe Japan News— The Japanese government is already looking with concern at the possible impact of an interruption in the supply of magnets.

It would not be the first time that Beijing has asserted its dominance in the market. Nor the first time that Tokyo suffers from it. It’s been over a decade, in 2010China has already suspended exports of groundwater to Japan for two years as a pressure measure for the tensions generated by the Senaku Islands.

Beijing plays its cards. That is the other reason why it is so important for China to consider limiting its exports of rare-earth magnet technology. The country is not another link in its supply chain. Its weight is hegemonic.

three years ago represented 60% of the production of REE —rare earth elements, for its acronym in English— and its weight in processing is even greater. As explains the researcher Andy Mok to Quartzthe Asian giant is present “at every stage as either a monopoly or a monopsony, which makes it very difficult for other countries to penetrate the chain significantly.”

China's other great challenge: preventing the United States and Europe from "bridge" with rare earths

More data for reflection. They are not the only percentages that invite reflection. China’s footprint in the global neodymium magnet market is estimated to be 84%an overwhelming participation but that remains below even that reached with samarium and cobalt magnets, greater than 90%.

The West is trying to loosen China’s grip on the global supply chain, but if Beijing finally chooses to limit the export of its technology, Japan would not be the only one facing a difficult scenario: so would the US and Europe.

the backdrop. There would be a third key factor, beyond the importance of magnets or the role that China plays in their supply: the context. If Beijing is not just any actor, neither is the context. The news published by Bloomberg either Nikei They jumped shortly after the Joe Biden administration tightened restrictions on “made USA” technology that Chinese companies can opt for. The decision was adopted months ago, but its significance goes beyond the borders of the US, reaching players as powerful as the Dutch manufacturer ASML and continues to leave derivatives even today, with other countries involved, such as Japan.

With such a backdrop, it is less surprising the comment from one of the sources consulted by Nikei about Beijing’s plans: “It is likely that they will use rare earths as a bargaining chip, they are a weak point for Japan and the US.” His challenge would be to prevent the West from ending up managing to bypass China.

Cover image: Dominik Vanyi (Unsplash)

In Xataka: We are looking for rare earths in remote places, but the great challenge is another: learning to recycle them



Source link