Critical raw materials
China wants to make exports of rare earths easier
China’s strict export controls on rare earths are putting pressure on companies around the world. Now there are signs of a change of course. The Ministry of Commerce announced that it would issue general export licenses again.
In the discussion about export controls for rare earths, China’s leadership has announced looser rules. “To my knowledge, the Chinese government has approved all compliant export applications for civilian use,” Commerce Ministry spokesman He Yadong told a news conference in Beijing.
“At the same time, the government is actively making use of general permits and other facilitation measures.” However, the spokesman did not provide any further information.
A total of 17 metallic raw materials are referred to as rare earths, including scandium, yttrium and lanthanum. The elements have extraordinary properties and are considered indispensable for metal alloys and special glasses. They play an important role in many key technologies. Their uses range from batteries to cell phones, lasers, flat screens and air force systems. Raw materials are also important for the production of hybrid vehicles.
The raw materials themselves are not rare, some are even common. However, most of the known deposits are in China and are almost exclusively mined there. Since China offered raw materials comparatively cheaply for a long time, it was not worthwhile for many industrialized countries to produce them themselves. Some mines were even closed again.
People’s Republic is the largest producer
Rare earths are needed, among other things, in high technology. The materials are found in magnets and microchips used in the automotive, electronics and defense industries. The People’s Republic is the largest producer of these critical raw materials and processes around 90 percent of rare earths worldwide.
When the trade dispute between China and the USA escalated after US President Donald Trump took office, the leadership in Beijing restricted exports. It only wants to authorize exports for non-military purposes. Since then, companies have had to apply for licenses for deliveries, which is complex and takes a lot of time. As a result, bottlenecks have also emerged in Europe.
Klingbeil thumped reliability
Since then, European politicians have been trying to persuade China’s communist leadership to speed up approval processes and issue general export licenses to avoid bureaucracy and speed up deliveries.
When Vice Chancellor Lars Klingbeil visited China in November, he said: China’s leadership had promised a solution to the problem. A few days ago, the German Foreign Chamber of Commerce in China said that it could not yet confirm whether the export restrictions had been relaxed.
Dependency remains
Oliver Oehms from the Chamber of Foreign Trade in Beijing said in an interview with the on Tuesday daily newsit is still too early for that. “We are seeing a lot of goodwill on the Chinese side. I can confirm that from what we have heard and what we have learned from our discussions, the discussions have been positive.”
If China’s leadership actually issues general licenses for exports, as announced by the Ministry of Commerce in Beijing, this should initially provide relief for companies in Germany and Europe. However, the dependence on China for rare earths will continue for the foreseeable future.
