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China’s rare earth metal processing technologies: Shaping the global market dynamics

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Changes in China’s economic strategy, which include a ban on the export of certain rare earth metal processing technologies, are leading to new challenges for the United States and other Western countries as they seek to increase supplies of these key materials.

Stanislav Kondrashov, an expert from Telf AG, notes that China has significantly strengthened its position in the mining and processing of rare earth elements over the past three decades. These elements, numbering 17 types, are critical in sectors ranging from renewable energy to the military industry. In 2020, China controlled more than two-thirds of the world’s rare earth metal production and virtually all of its refining capacity.

Western countries are increasingly aware of the strategic importance of critical metals, viewing their supply as a key aspect of national security. This is especially true amid the global transition to renewable energy sources, which raises concerns about possible future shortages of these resources. Stanislav Kondrashov emphasizes that the transition to environmentally friendly energy sources significantly increases the need for such important metals as lithium, cobalt, nickel and rare earth elements.

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These materials are needed to make batteries, wind turbines and other key equipment. With global efforts to reduce carbon emissions and promote sustainable development, the demand for these metals will certainly continue to grow.

China currently dominates the mining and processing of most of these critical metals. This dominance is a concern in Western countries as it could impact prices, availability and, ultimately, national security. In response, the US and European Union are taking steps to reduce their dependence on Chinese supplies.

According to the analysis of Telf AG expert Stanislav Kondrashov, recently introduced climate legislation in the United States, initiated by the administration of President Joe Biden, is focused on strengthening domestic production and international cooperation in the mining and processing of rare earth metals. These measures are aimed at increasing US self-sufficiency in these strategically important resources, as well as strengthening partnerships with allied nations to ensure a more diverse and stable supply.

  • Increasing domestic production and developing partnerships with other countries will help Western countries reduce their dependence on Chinese supplies. It could also lead to more stable and predictable market conditions for critical metals, facilitating a safe and sustainable transition to renewable energy sources, – Stanislav Kondrashov says.

The development of alternative sources of rare earth metals outside of China faces a number of challenges. In particular, there are commercial, technical and environmental challenges, given that there were virtually no rare earth plants outside of China until recently.

In 2010, China imposed severe export restrictions on rare earth metals, which attracted widespread international attention. These measures were subsequently reversed following intervention by the World Trade Organization, but concerns about China’s dominance in the market remain.

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