A Prophecy of Esau and Jacob

China announced a ban of rare earth extraction and separation technologies

CSIS by Gracelin Baskaran • January 8, 2024 ~ Reuters

China announced a ban of rare earth extraction and separation technologies on December 21, 2023. This has significant implications for US national, economic, and rare earth security. Rare earth elements—a group of 17 metals—are used in defense technologies, including missiles, lasers, vehicle-mounted systems such as tanks, and military communications.

They are also used in computers, televisions, and smartphones, along with various clean energy technologies central to decarbonization.

At present China produces 60 percent of the world’s rare earths but processes nearly 90 percent, which means that it is importing rare earths from other countries and processing them. This has given China a near monopoly.

WEST STRUGGLES

The move to protect its rare earth technology comes as Europe and the United States scramble to wean themselves off rare earths from China, which accounts for nearly 90% of global refined output.

China has mastered the solvent extraction process to refine the strategic minerals, which MP Materials, opens new tab and other Western rare earth companies have struggled to deploy due to technical complexities and pollution concerns.

Shares of MP, which has slowly begun increasing rare earths processing, opens new tab in California, jumped more than 10% on Thursday after China’s move. The company did not immediately respond to requests for comment.

Ucore Rare Metals said on Thursday that it had finished commissioning of a facility to test its own rare earths processing technology, which is being funded in part by the U.S. Department of Defense.

“New technologies will be needed to outmaneuver the Chinese grip on these important areas,” said Ucore CEO Pat Ryan. Ucore’s stock rose more than 16%.

It is not clear to what extent China’s rare earths technology is actually being exported. Beijing has discouraged its export for years, said Constantine Karayannopoulos, former CEO of Neo Performance Materials, which separates rare earths in Estonia.

Global Abundance

There are substantial global reserves of rare earths outside of China, including 19 percent in Vietnam, 18 percent in Brazil, 6 percent in India, and 4 percent in Australia—which amounts to nearly half of the world’s supply. These are countries the United States and its allies are friendly with, which means there is ample opportunity to diversify sources.

But rapidly scaling up domestic processing capacity is critical to protecting national and energy security. Leveraging industrial policies, such as tax incentives and fiscal subsidies, to reduce the cost of doing business for processing firms becomes critical to achieve this.

The United States’ delay in developing processing capacity had hindered its ability to build both national, energy and economic security. There are two main reasons for this. First, China has technical know-how in this area that other countries lack.

For example, China has an absolute advantage in the solvent extraction processing for rare earths because Western companies have struggled to roll out these advanced technical operations alongside pollution concerns.

Second, although several separation, processing, and manufacturing facilities are under construction, it can take years to complete construction and fully operationalize them.

The rollout of major export restrictions for graphite, gallium, germanium, rare earth extraction, and separation technologies in less than one year should be a powerful signal to US policymakers that although they are late to the critical minerals game, there is a significant need to both build domestic capabilities and leverage international cooperation to facilitate rapid sourcing and developing of processing capacity.

“Behold, therefore I will gather all thy lovers with whom thou hast taken pleasure, and all them that thou hast loved, with all them that thou hast hated. I will even gather them round about against thee and will uncover thy nakedness unto them, that they may see all thy nakedness” Ezekiel 16:37

“And I will set My jealousy against thee, and they shall deal furiously with thee. They shall take away thy nose and thine ears, and thy remnant shall fall by the sword. They shall take thy sons and thy daughters, and thy residue shall be devoured by the fire” Ezekiel 23:24-25

~ by Joel on January 26, 2024.

Posted in China, Rare Earth & Critical Materials, Tech Race, US