As per a recent revision of China’s export control law, the country is looking to impose a total ban on exporting rare earth technologies needed to manufacture highly powerful magnets. Rare earth elements like neodymium (aka NdFeB or NIB) and samarium cobalt are essential to make magnets used anywhere from smartphones and TVs, to spacecraft. So if this proposed export ban on rare earth magnet technology by China actually goes through, the price of electronic gadgets, EVs, and other high-tech devices may end up skyrocketing.
China ban on rare earth magnet technology:
As of August 2022, China owned about 85% of rare earth processing and over 90% of high-strength rare earth magnet production. Since the ban includes technologies for refining and processing rare earth elements, it could pose a huge problem in the global supply of powerful rare earth magnets.
China claims this to be a “national safety” concern but it’s likely something else. Many speculate that China is strengthening its hold on its dominant markets. And they might use them later as bargaining chips against the US and Europe. After all, it’s no secret that China is trying to build itself as a self-sufficient economy by as soon as 2025.
Alternatives to China’s ban
Although the ban is a terrifying thought, there are already some strong alternatives present. According to Investor Intel, this news is nothing more than a “paper tiger”. The experts at Critical Minerals Institute (CMI) seemed to share the consensus that it would have little to no impact in the long run.
Their reasoning is that rare earth refining is already up and running in countries like Estonia, France, and Japan. Likewise, the most popular of rare earth technologies—neodymium magnets—are already in production in Japan, Korea, the Philippines, Thailand, Germany, the UK, and the US. While NdFeB alloys are made in Vietnam and Thailand. These alternatives may serve to fulfill some of the demand if the ban does go through. But it’s hard to imagine them pumping out the same quantity as China.
China ban on rare earth magnet tech: Conclusion
Geo-political issues like these often have multiple facets to them so it’s hard to land on a single objective conclusion here. Though the technology is not exclusive to China, the country still holds a dominant market share. So only time will tell how the ban on rare earth magnet technology by China plays out in the global economy.
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