Precious rare earth metals belong to the state, China declares – POLITICO

Beijing has already banned the export of rare earth refining and magnet production technology. In January, it banned the export of gallium and germanium, both highly sought after by the computer chip industry.

Concerns that China is seeking to take control of the industry and could disrupt key technology, automotive and renewable energy supply chains have sparked a race to support supplies from alternative suppliers. Both the United States and the EU have launched efforts to source rare earths at home and abroad, including in Vietnam, Brazil and Australia.

A year ago, European Commission President Ursula von der Leyen announced the construction of the first large-scale rare earth refinery outside Asia, to be located in Estonia. She said the move would “strengthen European resilience and security of supply.”

A 2022 European Parliament study warned that over-reliance on monopolistic suppliers poses serious risks for Europe. “The EU imports 93 percent of its magnesium from China, 98 percent of its borate from Turkey and 85 percent of its niobium from Brazil. Russia produces 40 percent of the world’s palladium,” the study said. “The latter is a reminder of the strategic implications of Russia’s invasion of Ukraine and the need for the EU to prepare for an increasingly uncertain world.”

The EU has opened an investigation into allegations of anti-competitive trade in China’s electric vehicle market, which benefits from heavy government subsidies and preferential access to essential rare earth metals. Earlier this month, the two sides agreed to hold consultations to try to resolve the dispute.