The recent repression of China on exports of rare earth minerals could spell a disaster for the world automotive industry. There are fears that essential magnet reserves can run out in a few months if Beijing tightens its grip. China has expanded its export limits earlier this month to encompass seven key elements of the rare land and crucial magnets to produce electric vehicles, wind turbines and military aircraft.
This was considered a direct response to the heavy rates of 145% of President Donald Trump imposed on Chinese products. Government representatives, market merchants and car leaders have expressed their concerns that current stocks will be exhausted in three to six months and encourage companies to rush for additional resources to avoid significant setbacks.
Jan Giese de Tradium, a metal trading company based in Frankfurt, said that many car manufacturers and their suppliers only had two to three months of magnetic supplies.
He told the Financial Times: “If we do not see loving deliveries to the EU or to Japan at that time or at least nearby, then I think we will see real problems in the automotive supply chain.”
The objective of the tight export controls of China is on rare “heavy” and “medium” land, which are essential to produce high performance magnets capable of supporting high temperatures.
Elements such as dysprosium, terbium and samarium are essential for advanced military equipment and motors, rotors and transmissions of electric and hybrid vehicles.
A high -ranking automotive leader has warned that restrictions on critical minerals will have significant repercussions for Tesla and all other car manufacturers, evaluating export controls as a “seven or eight” in 10 in terms of gravity.
He said at the point of sale: “It is a form of reprisals where the Chinese government can say” OK, we are not going to go to the rate rate, but we will injure you in the United States and we will encourage companies to plead with your own origin governments to change the tariff policy “.”
The metals of the rare earths, although sides in the earth’s crust, are difficult to extract in a profitable and respectful of the environment. China is currently holding a quasi-monopoly on the treatment of rare heavy earths.
We still do not know how Beijing intends to apply the latest export controls.
