A trade war between Washington and Beijing ignites as China restricts exports of certain types of vital minerals

China announced on Friday its intention to request permits to export some graphite products, with the aim of preserving national security, as part of new measures aimed at controlling supplies of vital minerals.

China is the world leader in the production and export of graphite, and this material is essential for making most electric car batteries.

This measure comes in the context of China’s attempt to overcome the challenges it faces regarding control of the global market and its dominance of production.

This decision comes after the United States in July imposed similar restrictions on the export of gallium and germanium products, materials used in the manufacture of computer chips and electronic components.

The graphite export restrictions are seen as retaliation for US restrictions on technology sales to China, raising concerns in the West that China may reduce exports of other materials, including rare earths over which it has a dominance in production.

Besides graphite, materials controlled by China include metals such as cobalt, nickel and manganese, which are used in electric car batteries.

The move is expected to strengthen China’s position in the sector as the rest of the world seeks to increase its own battery production.

In 2010, China imposed restrictions on rare earth exports to Japan due to a territorial dispute, sending prices for these minerals soaring and prompting Japan to search for alternative sources.

At the time, China considered that these restrictions were to preserve the environment.

Rare earths are a group of 17 elements used in a variety of products, from military technology to consumer electronics, and include elements such as lanthanum, neodymium, thulium, and others.

China controls about 70% of the world’s rare earth production, and it also possesses a large proportion of the capacity to process these materials.

Although China is gradually reducing the world’s imports of rare earths, it remains the main source of these materials for many countries.

According to data from the US Geological Survey, China has the largest rare earth reserves in the world, with an estimated volume of approximately 44 million tons of rare earth oxide equivalent.

This represents approximately 34% of the global total.

Regarding other countries, Vietnam, Russia, and Brazil each have approximately more than 20 million tons of rare earths.

While India has about 6.9 million tons, Australia has about 4.2 million tons, and the United States has about 2.3 million tons.

In 2010, China stopped exporting rare earths to Japan as a result of a heated dispute over a group of disputed islands.

After that, Beijing decided to impose restrictions on exports of rare earth elements on a global level, and announced that this step comes within the framework of its efforts to preserve the environment and natural resources.

However, Japan, the European Union, and the United States have successfully challenged these measures before the World Trade Organization.

This dispute prompted Japan, which was heavily dependent on China as a major supplier of rare earths, to search for alternative sources to alleviate its dependence on China.

Japan invested in an Australian rare earth’s producer called Lynas and succeeded in reducing its imports of rare earth elements from China to 58% by 2018.

Rare earths exist in relatively reasonable quantities, but they exist in low concentrations and are often mixed with each other or with other radioactive elements, such as uranium and thorium.

These chemical properties make it difficult to separate rare earths from surrounding materials, and their processing generates toxic waste.

China’s lax environmental standards have helped consolidate its dominance of the rare earth industry in recent years, leaving Western producers of the industry leaving some Western countries such as Australia, Canada and the United States working to boost their domestic production of vital minerals with the aim of reducing their dependence on China.

Companies like MP Materials invest in extracting rare earths in the United States, but ship them to China for processing, as there are no downstream processing facilities in the United States.

Tesla, on the other hand, is working to reduce its reliance on rare earths in its electric vehicle industry, which helps reduce supply risks and environmental impact.

In addition, some countries are working to diversify sources of supply to reduce dependence on China in this vital sector.