ZIBO, China – The vice-tight grip that China wields over the mining and refining of rare minerals, crucial ingredients of today’s most advanced technologies, is about to become even stronger.
In a series of steps made in recent weeks, the Chinese government has made it considerably harder for foreign companies, particularly semiconductor manufacturers, to purchase the many rare earth metals and other minerals mined and refined mainly in China.
China produces almost all the world’s supply of these materials. The new restrictions solidify that market dominance.
As at Oct 1, exporters must provide the authorities with detailed, step-by-step tracings of how shipments of rare earth metals are used in Western supply chains. That has given China greater authority over which overseas companies receive scarce supplies.
China is also taking greater corporate ownership over the mining and production of the metals. In a deal that has received almost no attention outside the country, the last two foreign-owned rare earth refineries in China are being acquired by one of the three state-owned companies that run the other refineries in China.
Beijing’s recent moves to take charge of the supply chain include other obscure chemical elements that are also needed by semiconductor manufacturers.
On Sept 15, China’s Ministry of Commerce restricted exports of antimony, a material used in semiconductors, military explosives and other weaponry. In 2023, the ministry imposed export controls on two other chemical elements, gallium and germanium, also needed to make chips.
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National security officials have tightened the flow of information about rare earths. They have labelled rare earth mining and refining as state secrets.
The materials are a battleground in the broader fight between China and the US over advanced technology, including the semiconductors used for artificial intelligence. Each side is imposing export controls on the components it produces, while trying to develop supply chains at home or abroad, with trusted allies.
China’s Ministry of Commerce contends it is taking action to conserve scarce natural resources, discourage weapons proliferation and protect the country’s national security.
Rare earths from China are used in US-made F-35 stealth fighters as well as in wind turbines, electric car motors, camera lenses and the catalytic converters on gasoline-powered cars.
The International Energy Agency predicted that clean energy industries such as wind turbines and electric cars would need seven times as many rare earths in 2040 as what they needed in 2020. NYTIMES