Global supply chains for rare earth elements are under serious threat due to China’s increasing control over this sector. Analysts report that countries are facing significant challenges in establishing their own independent systems for the extraction and processing of strategic resources, amid China’s dominance in the global market.
This is reported by Business • Media
China Tightens Export Restrictions
According to experts, China controls 69% of global rare earth metal extraction, 92% of their processing, and 98% of magnet production. Such a scale of dominance creates a high level of vulnerability for other nations that rely on supplies from China. Since October 9, Beijing has expanded its list of export restrictions, adding five new items and tightening control over the use of rare earth elements in the semiconductor industry.
“Rare earth elements (REEs) are critically important for high-tech industries. A shortfall of just 10% in sectors dependent on REEs could lead to economic losses of $150 billion and increase inflationary pressure, experts predict.”
Furthermore, analysts do not rule out the possibility that China may impose restrictions on light rare earth elements in the future, where its influence is also absolute.
Joint Efforts of the USA, Australia, and Turkey
Due to the strategic importance of rare earth minerals and the growing dependence on China, the USA and Australia have signed an $8.5 billion agreement for the supply of Australian rare earth minerals to the United States. Under this agreement, both countries plan to direct over $3 billion into “critical projects” for mineral extraction within six months. The total value of resources involved in the cooperation is estimated at $53 billion. Australia, which possesses the fourth-largest rare earth mineral deposit in the world, aims to become a key alternative supplier for the USA.
Meanwhile, Turkey is also negotiating with the USA regarding the development of its own rare earth element reserves. Turkish President Recep Tayyip Erdoğan announced that significant deposits of rare earth elements totaling 694 million tons have been discovered in the Eskişehir province. Turkey plans to begin their extraction independently or in partnership with other countries to enter the top five largest producers of rare earth elements in the world.