Many European companies are currently waiting in vain for the permission of the Chinese authorities to export rare earths. This leads to production failures – and high costs.
China’s export controls in rare earths lead to production failures and financial losses in European companies. According to the European Chamber of Commerce, numerous companies are still waiting for the approval of the Chinese authorities to export rare earths. These materials are located in permanent magnets, smartphones, LEDs and electric motors.
According to the European Chamber of Commerce in China, 141 applications were granted only 19. Most of them are still open, many were classified as urgent.
Number of Production failures rises dramatic
The companies feel that it is so difficult to get the approval in their factories. For August, member companies of the European Chamber of Commerce in China reported seven production tilts, 46 for September. Further failures are expected. These caused high financial costs.
According to the European Chamber of Commerce, a member company reported that it had suffered losses of several million euros together with its Chinese suppliers. The chamber warns of a threat to global supply chains.
Two thirds of the rare earths worldwide from China
The Chinese state and party leadership exacerbated its export controls for several rare earths at the beginning of April during the customs dispute with the USA. China has a quasi-monopoly: two thirds of the global rare earths are produced in China and more processed. Companies around the world depend on China as suppliers.
At the EU China summit in July, to which EU representatives traveled to Beijing, the EU and China agreed to create a better care mechanism. According to the European Chamber of Commerce, more export permits were then issued by the Chinese authorities than before the meeting, but many companies still face considerable challenges.
