China bans export of tech used to make magnets out of rare metals, as global tensions continue to rise

In a significant development, China, the world’s leading processor of rare earths, has expanded its export ban to include the technology required to produce rare earth magnets. This move supplements an existing prohibition on technologies facilitating the extraction and separation of these critical materials. Rare earths, a group of 17 metals crucial for manufacturing magnets used in electric vehicles, wind turbines, and various electronics, have become a focal point of geopolitical tensions. The latest decision by China’s commerce ministry adds technology for preparing samarium-cobalt magnets, neodymium-iron-boron magnets, and cerium magnets to its “Catalogue of Technologies Prohibited and Restricted from Export.” The list also encompasses technology related to rare-earth calcium oxyborate and production technology for rare earth metals, further reinforcing China’s control over these strategic resources. Nathan Picarsic, co-founder of Horizon Advisory, a geopolitical consulting firm, emphasised the significance of diversifying supply chains, stating, “This should be a clarion call that dependence on China in any part of the value chain is not sustainable.” China’s tightening grip on rare earth technology exports aligns with its broader strategy to enhance control over critical minerals, sparking concerns among Western nations. The country, responsible for nearly 90 per cent of global refined output, has introduced stricter export rules for various metals throughout the year. The move is particularly challenging for the West, as Europe and the United States strive to reduce dependence on Chinese rare earths. Efforts to establish alternative processing capabilities have faced hurdles, with technical complexities and pollution concerns hindering progress. The recent ban includes the extraction process mastered by China through solvent extraction, a technique Western companies, such as MP Materials, have struggled to deploy effectively. Shares of MP Materials surged over 10 per cent in response to China’s announcement, underlining the market’s sensitivity to developments in the rare earth sector. MP Materials, which has gradually increased rare earth processing in California, has yet to comment on the latest development. Ucore Rare Metals announced the completion of the commissioning of a facility to test its own rare earth processing technology, partially funded by the US Department of Defense. Ucore’s CEO, Pat Ryan, highlighted the need for new technologies to overcome China’s dominance in this critical industry. Ucore’s stock rose more than 16 per cent following the news. While the extent of China’s actual export of rare earth technology remains unclear, Constantine Karayannopoulos, former CEO of Neo Performance Materials, noted that Beijing has discouraged such exports for years. Karayannopoulos stated, “This announcement just formalizes what everyone knew to be the case,” emphasizing the long-standing nature of China’s reluctance to share its rare earth technology with the international community. (With inputs from agencies)