Rare earth metals are definitive part of the battle

Where would the modern world be without a terbium? Probably not completely lost, but it would be hard to switch.

Terbium is one of the seventeen rare earth metals and becomes used In the magnets that are indispensable in numerous technological applications. Think of telephones, hard drives, cars and windmills. In the field of defense: combat aircraft, guided bombs, radar systems, drones. In addition, Terbium is in LED lighting, screens, fiber optic cables, lasers, stainless steel and nuclear power plants. And it is used as a quality in banknotes. Under a UV lamp, a euro-ahead green lights up, thanks to Terbium.

Since 4 April, many manufacturers have been painfully aware of the importance of Terbium. On that day, two days after the US President Trump had imposed half the world « reciprocal import duties », China introduced, as a counter -move, a permit obligation for the export of seven so -called medium -hand and rare earth metals. In addition to Terbium, these are Samarium, Gadolinium, Dysprosium, Lutetium, Scandium and Yttrium. All special in their own way and made useful by people.

The price From Terbium shot up by 25 percent, to more than 1,000 dollars per kilo. But the price was not the most important problem. The big question was what transport a permit would receive and which not. Because without these earth metals from China, factories worldwide would stop.

Monopoly

China had carefully selected the seven metals. For all rare earth metals, the majority of global production comes from Chinese mines. In the step that follows, China has an even stronger position: the chemical processing that the metals must purify takes place for more than 90 percent in China.

China’s dominance is even greater when processing heavy rare earth metals. For some metals in this group, including Terbium, China has only one competitor worldwide: a refinery in Vietnam. And that has been a year out of business Due to a tax conflict. See there: a real monopoly.

Although this predominance has been around for years, some Western producers were nevertheless raids. Unintentated European producers of car parts had to be production lines shut down. The permit system proved to be mainly unprepared and intransparant. Thousands Applications are now waiting for assessment and it is unclear who is or is not eligible.

Last week, after complaints from the European Commission, the Chinese Ministry of Economic Affairs offered to set up a « Green Channel », in which some applications for export to Europe are given priority. Which is unclear.

Why do the export restrictions actually apply to Europe, while US President Trump is responsible for the trade war on his own? « The Chinese government wants to radiate that she treats everyone equally, » says Zhu Junwei In a video call from Beijing. She is director of the Center for American Studies within the Chinese think tank Grandview Institution. She previously worked for twenty years as an analyst in the Chinese armed forces. « In addition, China wants to prevent products from being diverted through Europe for the American market. »

Last Wednesday, after two days of negotiations between Chinese and American delegations in London, explained Trump that everything is ‘arranged’ again. The conversations about mutual import duties were smooth again and China would resume the deliveries of metals and magnets.

But something structurally seems to have changed. Analyst Zhu: « I don’t think China would like to stop exports for a longer period of time, but that the permit obligation can be maintained. » The permit applications provide China information and control, two things that you don’t just leave. The information is about who uses China’s products and how much. That is good to know in times of increasing rivalry. The check consists of the possibility of delaying or refusing permits, depending on the need. Zhu: « It offers the opportunity to be stricter when the tensions rise. The US does exactly the same, but with semiconductors. »

Very shocked

China has looked very well at the American system of sanctions and export restrictions, says Zhu. « When Trump started a trade war in his first term, China was unprepared. It was not able to hit back well and is very shocked. Since then it has been very precisely mapping and categorizing his own trade flows. You have to know how the other party is dependent on you and where you can put pressure. »

Rare earth metals are a very suitable means of pressure for China, says Zhu. Not only because of the monopoly position, also because it is a small market. For example, the terbium content in a magnet is smaller than 1 percent. Zhu: « In total it concerns a few billions of dollars a year. If that trade falls away, the Chinese economy hardly suffers any damage. »

China could just see reason to turn the thumb screws again. In May, China and the US agreed to freeze their out of control tax struggle and to conclude a fully -fledged trade agreement within three months. Before it is August 10, a lot of work still has to be done. Zhu does not expect it to work.

For several years, the European Commission has been trying to find alternative supply routes for rare earth metals and other critical raw materials. As part of it selected The committee in March 47 ‘strategic projects’ in the EU that receive support from Brussels, from a lithium mine in Portugal to a battery recycling factory in Finland. At the beginning of this month arrived there thirteen Strategic projects at from outside the EU. For example, Europe is competing with Trump in Greenland and Ukraine, by investing in graphite mines. The list also contains mining projects for most of the seventeen rare earth metals in Malawi and South Africa. It will take years before they are operational.

« If you have the mines, you are not there yet, » says Zhu. « It’s also about the value chain afterwards, starting to refine. » Not that she thinks China can no longer be overtaken. « Printing agents do not stay forever. Like China, the US tries to catch up by developing new chips, so the technological development in the field of metals is continuously continuing. If, for example, new methods are invented to refine faster and easier, the entire playing field will change. »

To share

Mail the editors