The Chinese state enterprise world times Wednesday pointed to soaring rare earth exports as a bright spot in China’s booming economy, suggesting that the international obsession with ‘green energy’ could be the Communist Party’s path to wealth and prosperity. power in the years to come.
Rare earth exports fell in March, but fell considerably less than most of China’s other profitable exports, falling 6.5% after two months of growth at nearly 11%.
the world times celebrated these export figures as proof that China’s grip on the global rare earths market remains strong, although he pointed to some obstacles that should not be taken lightly:
According to customs data, China’s rare earth exports stood at 4,845.2 tonnes in March, which industry watchers say represents “a relatively high level” in terms of monthly trade volume, showing that trading in the precious metal was unaffected by geopolitical tensions. and supply chain issues caused by the COVID-19 pandemic.
The dollar value of first quarter rare earth exports rose 78% from the same year last year to $244.2 million as prices continued to climb. The figure compared to the 61.8% expansion during the January-February period.
But some industry insiders said the world’s biggest rare earth exporter could see its exports plummet in the coming months as China’s rare earth production capacity faces hurdles. The main border gates between China and Myanmar – which account for around half of China’s rare earth mineral supply – have been closed again since the start of the year, posing serious problems for the country. transfer of raw material supply and further price fluctuations.
Interestingly, the world times saw nothing to fear from other countries, including the United States and Australiastepping up their own rare earth mining operations to reduce China’s market dominance.
China is taking aggressive steps to consolidate its control of the market for these minerals, which are indispensable for a variety of electronics and manufacturing applications, but are especially crucial for “green” technologies.
In December 2021, Beijing blessed a merger of three huge state-owned mining companies to create the giant China Rare Earth Group, a single entity that controls 30% of Chinese production – and China accounts for 80% of global supply.
While Chinese officials have claimed that this merger was only a useful step to ensure the stability of global supply chains, international analysts have seen the birth of a cartel similar to OPEC, giving China the ability to manipulate prices the same way OPEC influences the world price of oil.
The Chinese Communist Party does not hesitate at all to use such market power for political purposes. The Center for Strategic and International Studies (CSIS) Noted last April that China controls “most of the world’s capacity for key components used in the manufacture of lithium-ion batteries and 80% of the world’s battery cell manufacturing capacity”, a lever that will prove to be increasingly powerful as Western countries push their economies to become more dependent on these products.
The European Union (EU) warned around the same time that China was dominating the market for at least 30 raw materials deemed crucial to European industry, making those supply chains “extremely vulnerable”. China’s demand for rare earths is growing rapidly, suggesting that Beijing will simply prioritize its own needs over other nations and dominate all industries that depend on these minerals.
Senators Tom Cotton (R-AR) and Mark Kelly (D-AZ) in January introduced a bill that would ban US defense contractors from buying rare earths from China by 2026 and establish a permanent national stockpile of minerals.
The United States currently has only one rare earth mine and no domestic processing capacity, but Cotton noted that America was the world’s largest supplier in the 1980s and that allowing China to take such a dominant position was “simply a political choice made by the United States”.
Kelly said the bill would “strengthen America’s position as a global technology leader by reducing our nation’s dependence on adversaries like China for rare earth elements.”
the Japan time posited in February that China’s creation of the mammoth China Rare Earth Group has prompted U.S. lawmakers to take stronger action against Beijing’s dominance of the industry.
Japan itself doesn’t need a wake-up call anymore, as the Chinese blocked its supply of rare earths for several weeks in 2010 during a political dispute over the Senkaku Islands, then imposed export restrictions that significantly increased the price of minerals for several years thereafter.