The Chinese government earlier this month announced that it had halted exports of a number of critical rare earth minerals, as well as magnets, as its trade war with the US continued to escalate. The current export ban applies to all countries, not just the US, putting pressure also on manufacturers based in Europe, South Korea and Japan.
Rare earth minerals are widely used in electronic components and high-performance magnets due to their unique magnetic, phosphorescent and catalytic properties. They are used by high-tech industries, from automotive and semiconductor to defense, aerospace and robotics. In the automotive industry, rare earths are found in magnets used in electric motors that power electric vehicles (EVs), as well as in on-board electronics.
China accounts for over 90% of the world’s rare earth refining capacity, according to the International Energy Agency, and a similar proportion of global rare earth magnet production. Extensive rare earth mineral deposits are located in China’s northern Jiangxi province, which is also major magnet production hub for companies such as JL Mag.
Rare earth magnets make up a very small proportion of China’s overall exports, so halting exports will not have a significant impact on the country’s domestic economy. But the global impact of the ban could be significant.
According to reports, shipments of magnets have already been halted ahead of a new, stricter regulatory framework, which is expected to require exporters to apply for export licenses with strict conditions attached. US defense-related companies could be cut off permanently from Chinese supplies. Global manufacturers fear that once licenses are introduced they will be subject to long delays, resulting in the depletion of global rare earth stockpiles. Global rare earth prices have already surged on the news.
“China halts exports of rare earths, magnets” was originally created and published by Just Auto, a GlobalData owned brand.
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