02.08.2023 14:10 | Monitoring
In their quest to transition to clean energy, Western countries have inadvertently become dependent on Chinese resources. According to a report by the International Energy Agency, China controls 87% of the world’s capacity to refine the 17 rare earths needed for green, emission-free energy. Today, magnetic components from the iPhone, through Tesla electric cars, to the F-35 fighter jet do not work without Chinese resources. In addition, due to strict emission limits, Western processing companies find it difficult to develop a way to process precious rocks more efficiently.
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The world’s two largest rare earths companies outside of China, the US’s MP Materials and Australia’s Lynas, are grappling with how to transform rocks from their mines into electromagnetic components key to the functioning of most Western products from the iPhone to the F-35 fighter jet. Technical complexities and pollution concerns prevent companies from increasing the volume of rock processed at the expense of China, which according to the International Energy Agency controls 87% of the world’s rare earth refining capacity.
The West’s push to create an independent supply of the critical mineral has gained urgency after Beijing last month imposed export controls on the strategic metals gallium and germanium, sparking global fears that China could next block exports of other rare earths or entire processing technologies.
But breaking China’s control over a key group of 17 metals needed for the transition to clean energy will be extremely difficult, as the refining of its own rare earths is bound by strict emission limits in Western countries. China made a strategic decision decades ago to develop its rare earth processing capacity, despite the environmental consequences.
In recent years, plans by the Australian company Lynas to build an American rare earth refinery with a partner from Texas have failed. In the meantime, Lynas said it was struggling to complete a rare earths refinery in Western Australia, where it was facing multiple hurdles. MP’s goal to refine its own rare earth metals in 2020 has been halted by the COVID-19 pandemic and technical issues, pushing its target to late 2023. So far, the American company is dependent on Chinese technology for rare earth refining.
“The process of processing rare earths is tedious, with many stops and returns to the beginning,” CEO and largest shareholder of MP Jim Litinsky told Reuters. Not only is US processing company MP dependent on Chinese technology, but China’s Shenghe Resources is also its second largest shareholder.
According to analysts, similar problems are plaguing a dozen other global companies that are striving for independent refining. “In recent years, China has cleverly invested heavily in processing capacity to efficiently convert rare earths into magnets suitable for modern electronic devices,” said Allan Walton, professor of metallurgy at the University of Birmingham.
Refining expertise has allowed China to drive down rare earth prices at various stages of the processing chain to its advantage, including low prices for finished products that are unattainable for Western firms developing their own technologies. Thus, Western companies continue to prefer to send their mined material to China for processing instead.
For years, Beijing has allowed the import of a lightly processed rock known as rare earth concentrate for refining. This strategy helps ensure prices that incentivize other countries to dig new mines, but not to build processing plants. MP delivered about 43,000 tons of concentrate to China for refining last year.
Benchmark Mineral Intelligence estimates that China currently refines 89% of the world’s supply of neodymium and praseodymium, key metals for electric car magnets, and that dominance is not expected to decline much by 2028.
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author: jma
2023-08-02 12:08:00
#Tesla #iPhone #F35 #China #numbers #overwhelming
