Website: Europe.com

[vc_section][vc_row][vc_column][distance desktop_type=”30″][lvs][distance desktop_type=”30″][vc_btn title=”Source – BNN Bloomberg” color=”sky” i_type=”material” i_icon_material=”vc-material vc-material-perm_device_information” add_icon=”true” link=”url:https%3A%2F%2Fwww.bnnbloomberg.ca%2Fchina-takes-the-trade-fight-to-europe-targeting-the-green-transition-1.1941138|target:_blank”][distance desktop_type=”30″][vc_column_text](Bloomberg) — China’s decision to restrict critical mineral exports will hit key sectors in the European Union’s effort to decarbonize its economy, and demonstrates the limits of western aspirations to shift supply chains beyond the reach of policymakers in Beijing.

China is the largest global producer of the two minerals, gallium and germanium, which will be subject to export restrictions next month and that are crucial to the semiconductor, telecommunications and electric-vehicle industries. The EU gets 71% of its gallium from China and 45% of its germanium.

The move comes weeks after the EU unveiled a new economic security strategy, which seeks oversight of critical technology exports and may curb outbound investments in the name of national security. The proposal is part of a growing push within the bloc to strengthen security tools as countries such as China and Russia increasingly use trade and the control of critical supply lines to advance political and even military goals.

“China’s action is a stark reminder of who has the upper hand in this game,” Simone Tagliapietra, a researcher at the Bruegel think-tank in Brussels, said in an interview. “The harsh reality is that the west will need at least a decade to de-risk from China’s minerals supply chains, so this really is an asymmetric dependency.”

The EU was taught a difficult lesson when Russia invaded Ukraine last year, triggering surging inflation and fears that entire industries might collapse as the bloc rushed to source new supplies of oil and gas. The bloc’s member states were torn over how to respond to Moscow, with some countries overly reliant on cheap Russian crude and gas.

The same dynamic is also playing out with the EU’s policy on China, with certain nations unwilling to put their trade relationship with the world’s second-largest economy at risk.

Reacting to China’s announcement, German Economy Minister Robert Habeck said the government in Berlin must “learn the lesson from recent years in terms of what a certain sovereignty in production, energy and economic security really means.”

“You probably saw today that China is really starting to up the ante regarding two types of metal,” Habeck said at a chemicals industry lobby conference. “If that happens with lithium or something similar then we really have a different kind of problem,” he warned.

China’s $6.8 trillion consumer marketplace is a critical destination for European exports of cars, pharmaceuticals and machinery. German automakers Volkswagen AG, Mercedes-Benz AG and Bayerische Motoren Werke AG have built dozens of factories in China and all three manufacturers now sell more vehicles in China than any other market.

The US has pushed for Europe to take a tough line with Beijing, and European Commission President Ursula von der Leyen has argued that the bloc needs to “de-risk” from China, but short of a full-blown “decoupling.”

The EU launched its Critical Raw Materials Act in March to ease financing and permitting for new mining and refining projects and strike trade alliances to reduce the bloc’s dependence on Chinese suppliers. The US and Europe have also been looking to set up a “buyers’ club” to strike supply deals and investment partnerships with producing nations.

“We have seen a very deliberate hardening of China’s overall strategic posture for some time and it has now been matched by a ratcheting up of increasingly assertive actions,” von der Leyen said in a policy speech earlier this year. “Just as China has been ramping up its military posture, it has also ramped up its policies of disinformation and economic and trade coercion.”

And member states have been taking even stronger measures. The Dutch government announced last week measures that will prevent ASML Holding NV — a company with a near-monopoly on the machines needed to make the most advanced semiconductors — from selling some of its equipment to China.

WTO Complaint

The commission, the EU’s executive arm, could confront China’s new export restrictions via dispute settlement proceedings at the Geneva-based World Trade Organization.

However, such a dispute could take years to wind its way through the WTO’s partially dysfunctional dispute settlement body. Furthermore, China’s claim that the measures are necessary for national security could trigger a WTO loophole that allows governments to take “any action which it considers necessary for the protection of its essential security interests.”

But more immediate for the EU, an escalation of tensions could threaten the bloc’s ability to transform its economy to become more environmentally friendly.

The Chinese move comes as the EU is embarking upon an unprecedented overhaul to eliminate carbon emissions across its entire economy, from energy production to agriculture and transport. The Green Deal, whose target is to make the region climate-neutral by 2050, will require access to massive amounts of critical materials used in everything from solar panels to electric vehicles.

“Europe today largely depends on China for a set of clean technologies and critical components, so an escalation of these tensions might make Europe’s green transition more bumpy for sure,” Tagliapietra said.[/vc_column_text][distance desktop_type=”30″][/vc_column][/vc_row][/vc_section]

[vc_section][vc_row][vc_column][distance desktop_type=”30″][lvs][distance desktop_type=”30″][vc_btn title=”Source – Euractiv” color=”sky” i_type=”material” i_icon_material=”vc-material vc-material-perm_device_information” add_icon=”true” link=”url:https%3A%2F%2Fwww.euractiv.com%2Fsection%2Feconomy-jobs%2Fnews%2Fcritical-raw-materials-eu-countries-push-for-more-ambitious-targets%2F|target:_blank”][distance desktop_type=”30″][vc_column_text]In a fresh agreement on the Critical Raw Materials Act (CRMA), EU countries want to further increase targets for domestic processing of strategic raw materials, despite public commitments that processing should be done in resource-rich partner countries. 

In March, the European Commission proposed the CRMA, a draft law aiming to increase domestic production of critical raw materials and reduce dependency on other countries, particularly China.

The law is part of the EU’s overall ambition to diversify supplies of key products and materials, in order to “de-risk” the economic relationship with China.

While the Commission proposed that 40% of the processing and refining of strategic materials used in the EU take place in Europe, national governments want to go even further, raising the non-binding target to 50% by 2030, according to an agreement reached between EU ambassadors on Friday (30 June), seen by EURACTIV.

Furthermore, national governments want to raise ambition on recycling strategic materials, increasing from 15 to 20% the target for what consumption should be met by domestic recycling capacities.

Meanwhile, the member states’ position leaves open how this higher ambition should be reached, as the proposal does not include any additional financial means to support the uptake of domestic production while deadlines for permitting procedures are kept, and in some cases extended.

The agreement includes the establishment of a group of member states’ representatives, which should regularly issue reports “describing obstacles to access to finance and recommendations to facilitate access to finance” for projects considered of strategic importance.

Domestic processing at odds with international partnerships

The increased ambition for domestic processing of raw materials comes despite public statements by EU leaders not to “turn inwards” on trade. Instead, EU and national officials have stressed on many occasions that the bulk of the critical raw materials needed will come from resource-rich third countries.

“In many places in the world, raw materials are being dug out of the earth and loaded onto ships with all the unusable by-catch, and then the first processing stage takes place elsewhere in order to obtain the actual raw material from it,” German Chancellor Olaf Scholz (SPD/S&D) told journalists on Friday on the sidelines of a meeting of EU leaders in Brussels.

“If we now work globally to ensure that this takes place in the countries where the raw material is extracted, then for me this is also a contribution to strengthening these countries, creating economic development opportunities and at the same time intensifying the global supply relationships and thus the resilience of a global network in terms of raw material supplies,” Scholz added.

However, critics have already argued that the 40% processing target in the Commission’s proposal would be at odds with this goal.

Hildegard Bentele, an EU lawmaker for the centre-right EPP group told journalists in May she believed that “we can achieve many good new partnerships and also a lot in geopolitical terms”.

“But then we have a percentage figure of 40% for processing in the EU, which would contradict the fact that we actually want to do this abroad with our partners,” Bentele, who acts as shadow rapporteur for the CRMA added, calling the 40% target already “very ambitious”.

The draft law still has to be negotiated between European Parliament and Council, with negotiators hoping to find an agreement before the end of the year.

Aluminium added to list of strategic materials

In their proposed changes to the proposal, member states also push for the inclusion of aluminium on the list of strategic materials, something that was contested as the European Commission did not include aluminium in the scope of the draft law, while its impact assessment had included the material.

This point, too, could become contentious with the European Parliament, as its chief negotiator Nicola Beer (FDP/Renew) said she does not “see any scope for expanding the corresponding lists for political and strategic raw materials quasi arbitrarily now”.

While bauxite, the pre-product of aluminium, was considered a “critical raw material” in the initial Commission proposal, it did not yet make the list of “strategic raw materials” subject to the domestic production target and accelerated permitting procedure.

While Beer proposed the list of strategic raw materials to be reviewed and potentially updated every two years, national governments propose a review “at least every three years”.

Member states also added a clarification on Environmental Impact Assessments, which should partly be excluded from the scope of deadlines for permitting procedures set in the new law.

In the original Commission draft, permitting processes for mining projects that are deemed critical by a yet-to-be-established critical raw materials board should not take longer than 24 months.

While member states seconded the ambitious timeline, they argued that some parts of environmental assessments should not fall under the proposal for how much time public authorities are allowed to take to grant a permit for projects deemed strategic.

“This also includes public consultations which are directly linked to public acceptance,” government representatives noted, a key obstacle to domestic sourcing of raw materials as many mining projects face local resistance.

The proposed changes would also allow member states to ask for more time to issue the permit for strategic projects, “where the nature, complexity, location or size of the proposed project so require”.

Potential extensions could see six months added to the 24 months allowed for mining projects, and three months to the 12 months allowed to grant permits for processing or recycling facilities.[/vc_column_text][distance desktop_type=”30″][/vc_column][/vc_row][/vc_section]

[vc_section][vc_row][vc_column][distance desktop_type=”30″][lvs][distance desktop_type=”30″][vc_btn title=”Source – The Guam Daily Post” color=”sky” i_type=”material” i_icon_material=”vc-material vc-material-perm_device_information” add_icon=”true” link=”url:https%3A%2F%2Fwww.postguam.com%2Fbusiness%2Ffight-for-critical-minerals-is-heating-up%2Farticle_db9edf7e-19fa-11ee-adaf-1faa9e11a793.html|target:_blank”][distance desktop_type=”30″][vc_column_text]Over more than a century, oil companies have developed a vast industrial network to extract, refine and deliver their product to customers around the world. Sourcing the materials needed to build an alternative, less carbon-intensive economy presents a whole new set of challenges. China has tackled these successfully for more than a decade, making it the undisputed leader in “critical minerals” used in electric-vehicle batteries, solar panels and wind turbine magnets. If the United States and Europe are going to have a chance of challenging its dominance in these clean technologies, they need to catch up fast.

What are critical minerals?

Nations have long sought to protect supplies of materials they deem vital to their industrial and military capabilities. About 50 metallic elements and minerals meet those criteria in the United States and European Union. Most were chosen for their role in building the infrastructure required to reduce carbon emissions blamed for climate change, a mission that’s backed by hundreds of billions of dollars in subsidies and tax breaks. Some are also used in semiconductors for civil and military communications.

Critical materials include:

• Lithium, graphite, cobalt, nickel and manganese – used predominantly in EV batteries
• Silicon and tin – EVs, smart grids, power meters and other electronics
• Rare earths – wind turbine magnets, EVs
• Copper – grids, wind farms, EVs
• Gallium and germanium – solar panels, EVs, wireless base stations, defense radar, weapons-sighting systems, lasers

Why is sourcing them a challenge?

While many critical minerals can be found in a raw state in large quantities around the globe, extracting and refining them into a usable form can be costly, technically challenging, energy intensive and polluting. China dominates the entire value chain in many of these products, accounting for more than half of the world’s production of battery metals including lithium, cobalt and manganese, and as much as 100% of rare earths. Even in less rarefied metals such as copper, forecasts of massive demand growth have sparked a realization that there might not be enough to go around. In 2023, the E.U. categorized copper and nickel as critical raw materials for the first time, even though there are plenty of friendly producing nations across the world. Senators are lobbying for the United States to do the same for copper.

Why is relying on China a problem for Western nations?

Overdependence on supplies from any single country is something that manufacturers try to avoid, as it leaves them exposed when that country’s industrial output is disrupted by events such as power crises, pandemics or social unrest. With China, there’s also a febrile relationship with the United States to consider, as the tensions risk blowing up into an all-out trade war involving punitive tariffs or export restrictions.

Here are some precedents:

• In July, China said it was imposing restrictions on exporting gallium and germanium, a move that’s likely to raise costs for hardware manufacturers.
• China’s industrial hubs and logistics networks ground to a halt in the early stages of the coronavirus pandemic, imperiling global supplies of many industrial commodities and sending their prices soaring.
• When power curbs slashed Chinese production of silicon, it sent prices for the metalloid up 300% in less than two months in 2021 and caused turmoil for buyers in sectors including car making and chemicals.
• In 2010, China blocked sales of rare earths to Japan following a dispute over ownership of a group of islands in the East China Sea. The move shook Japan’s electronics sector and threatened to choke off global supplies of high-power magnets produced in Japan employing rare earths from China.

How did China get so dominant?

Its preeminence was decades in the making. As early as 1992, leader Deng Xiaoping was highlighting his country’s potential to lead the world in critical minerals, saying: “The Middle East has oil. China has rare earths.” As its economic growth accelerated, domestic demand for industrial commodities began to far outstrip local reserves. It responded with huge investments in mining assets overseas and came gradually to dominate the refining and processing of virtually every industrial commodity, as well as a host of obscure byproducts such as tellurium, gallium and germanium. Today, it’s the leading producer of 20 critical raw materials, as measured by its share of global mined or refined production. In the case of the rare-earth element dysprosium, China is responsible for 84% of mined supply and 100% of refined production, according to an E.U. analysis. It mines only a small amount of cobalt and nickel but is by far the largest producer of refined forms of the metals, and Chinese companies have been investing heavily in cobalt and nickel mines in countries such as Congo and Indonesia.

What are China’s economic rivals doing about it?

President Joe Biden’s Inflation Reduction Act passed in 2022 aims to help the United States meet its climate goals through investments in renewables and EVs, curb prices of the raw materials needed for the transition and ease reliance on unreliable or hostile overseas suppliers. The E’U.’s Critical Raw Materials Act launched in March aims to ease financing and permitting for new mining and refining projects and strike trade alliances to reduce the bloc’s dependence on Chinese suppliers. Washington is working on ad hoc trade pacts to ensure its incentives to boost domestic production don’t end up locking friendly suppliers in the E.U. and Japan out of the U.S. market. The United States and Europe are also looking to set up a “buyers’ club” to strike supply deals and investment partnerships with producing nations. At a meeting of Group of Seven nations in April, ministers agreed to commit $13 billion to fund new mining projects. Germany is planning a similar fund worth as much as 2 billion euros.

Will it work?

With China and other nations with fast-growing economies increasingly restricting exports of industrial raw materials, the United States and the E.U. are rushing to build their own refining capacity. But sourcing the mined product required is more problematic. In Congo, for instance, the United States has signed a preliminary agreement to help the country develop an EV supply chain. However, more than half of the country’s cobalt mines are already owned or controlled by Chinese companies. The under-sanction Israeli billionaire Dan Gertler has interests in the other large-scale mines that aren’t in Chinese hands. The Congolese government is lobbying to get the U.S. sanctions on Gertler lifted, but doing so would leave the Biden administration open to accusations of double standards.

How is China responding to the U.S. push?

Even before any direct response from Beijing, Chinese companies look set to consolidate their grip on key metals such as nickel and cobalt. In lithium, while the United States is building out supply networks with free-trade partners such as Canada and Australia, China is consolidating its relationships with African nations that are expected to be among the world’s biggest producers of the metal by the end of the decade. In rare earths, there are signs that China may seek to forestall the West’s efforts to build new mining and processing capacity by restricting exports of key technology and equipment.[/vc_column_text][distance desktop_type=”30″][/vc_column][/vc_row][/vc_section]

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Beijing will impose export controls on two rare elements essential for manufacturing semiconductors, in apparent retaliation after the United States and Europe restricted chip exports to China.

Gallium and germanium will be subject to export controls starting August 1 “to protect national security and interests,” China’s Ministry of Commerce said in a statement Monday.

Exporters of these raw materials will need to apply for “special permission from the state” to ship them out the country, the statement said.

Gallium and germanium are used in a variety of products, including computer chips and solar panels. Both are on the European Union’s list of critical raw materials, which are deemed “crucial to Europe’s economy.”

China is by far the world’s biggest gallium producer and a leading global producer and exporter of germanium, according to the U.S. Geological Survey.

The measure is the latest development in the global battle to control chipmaking technology, which is vital for everything from smartphones and self-driving cars to advanced computing and weapons manufacturing.

Beijing’s move comes just days after the Dutch government announced new restrictions on exports of some semiconductor equipment, drawing an angry response from Beijing, according to Reuters. The new rules mean that ASML (ASML), Europe’s largest tech firm, will need to apply for export licenses for products used to make microchips.

Japan and the United States have also taken steps to limit Chinese companies’ access to chips and chipmaking equipment. Italy last month imposed several curbs on Pirelli’s biggest shareholder, Sinochem, to block the Chinese government’s access to sensitive chip technology.

An editorial Monday in a prominent state-owned newspaper China Daily hinted that Beijing’s new policy was retaliation for similar moves by Washington and its allies.

Critics of the decision “could ask the US government why it holds the world’s largest germanium mines but seldom exploits them. Or they could ask the Netherlands why it included certain semiconductor-related products… in its export control list,” the editorial said.

China’s announcement of the new export curbs comes on the eve of a visit by US Treasury Secretary Janet Yellen to Beijing from July 6 to July 9. Yellen will meet with senior Communist Party officials, according to a statement from the Treasury.

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