On August 15, 2024, China's Ministry of Commerce announced that export controls on antimony would come into effect on September 15. This is the latest in a series of export restrictions by China, which dominates global rare earth mining and processing.
Antimony is used in the manufacture of flame retardants, lead-acid batteries, and as an alloy to strengthen other metals. In addition, antimony has a number of military applications, including night vision devices, armor-piercing ammunition, and the manufacture of nuclear weapons. China accounted for 2023% of global antimony production in 48.
Antimony prices reached an all-time high of over USD 2024 per tonne at the end of July 22, after roughly doubling since the beginning of the year due to global shortages.
The recent announcement by the Chinese Ministry of Commerce regarding antimony has also sent tremors through the global supply chain for tungsten. Essential to a range of military applications, tungsten is extremely hard and has the highest melting point of any metal. China currently dominates the export market for tungsten, producing about 80% of the world's supply, with some experts predicting that China will impose export controls on tungsten by the end of the year, if not sooner.
Both antimony and tungsten are included in the EU list of critical raw materials, with tungsten being considered a strategic raw material.
Review of export restrictions in 2023
Just over a year ago, on August 1, 2023, China announced export restrictions on the rare earths gallium (Ga) and germanium (Ge) and high-quality graphite (C) to “protect national security”.
The applications of germanium and gallium include solar products, fiber optics, and radio frequency chips for mobile phones and satellites. It is worth recalling that Beijing's export controls were imposed after the US decided to restrict China's access to advanced semiconductors in 2023.
USA recognizes dependence on rare earths as a “national emergency”
As reported in a previous edition of this newsletter, Mike Pompeo, former CIA chief and Secretary of State under President Donald Trump, traveled to Barcelona in June 2023 to open the annual meeting of the Rare Earth Industry Association (REIA). Pompeo is a special advisor to the United States Rare Earth (USARE). In September 2020, President Trump declared a national emergency over the "unacceptable US dependence on foreign adversaries for critical minerals" - a thinly veiled reference to China. This policy will be continued by his successor, President Joe Biden. There is a risk that China could reduce or stop exports of critical rare earths if tensions over the flashpoints of Taiwan or the South China Sea escalate into open conflict.
EU response: CRMA aims to reduce foreign dependence in some areas
The danger of foreign dependence is also recognized in the EU. "Lithium and rare earths will soon be more important than oil and gas," stressed European Commission President Ursula von der Leyen in her State of the Union address in 2022. "By 2030, our need for these rare earth metals will increase fivefold," she said. "As a result, we are experiencing a global race to supply and recycle critical raw materials."
These strong words were followed by actions. After more than a decade of fact-finding and consensus-building, the EU adopted the Critical Raw Materials Act (CRMA), which came into force in May 2024.
The CRMA requires that by 2030, 10% of the EU's annual consumption must be mined domestically, 40% must be processed domestically and 25% of all processing waste and end-of-life materials must be recycled domestically. The act also stipulates that the EU may not source more than 65% of a strategic raw material from a single country.
Fanfare over major discovery of rare earths in Norway
CRMA's long-term strategy is based on four pillars, the first of which is mining. There has been a lot of excitement in the media about this topic recently. In June 2024, Rare Earths Norway announced the discovery of the largest rare earth deposit in Europe to date. The deposit, the so-called Fen Carbonatite Complex, is located on the southern tip of Norway on the site of an extinct volcano.
Contains important raw materials for electric vehicles and wind turbines
Measured under the Joint Ore Reserves Committee Code 2012, the Fen deposit contains an estimated 559 metric tonnes grading 1,57% rare earth oxides (TREO). This equates to 8,8 metric tonnes of TREO with "reasonable prospects for economic extraction". This also includes an estimated 1,5 tonnes of magnetic rare earths used in electric vehicles and wind turbines.
There is also further upside potential for the Fen deposit. Current estimates for the rare earths are based on drilling at a depth of 468 metres below mean sea level. Recognized geological sources in Norway indicate that the deposits could extend to 1 metres below sea level.
While the scale of the discovery is significant, the key question is how soon mining can begin on an industrial scale and how long it will take to make a significant contribution to meeting Europe's demand for rare earths and metals.
According to a report by the Reuters news agency, non-EU member Norway could cover (only) 2031% of the EU's demand for rare earths by 10.
Implementation hurdles for other aspects of the CRMA
In addition to the emphasis on mining in the CRMA, there are three other strategic pillars: processing, recycling and diversification of supply. There are challenges in implementing all of these pillars.
application – The CRMA's main target is rare earths such as neodymium, praseodymium, dysprosium and terbium, which are needed to make magnets used in electric batteries and wind turbines. However, the strategy has a major loophole – imports of finished magnets made in China are not affected.
Neo Performance Materials is building a permanent magnet factory in Estonia that will produce 2 tons per year in two to three years - enough magnets to power about 000 million electric vehicles. Neo estimates that its magnets would cost about $1,5 to $20 more per vehicle than imported magnets from China. It is not immediately clear whether manufacturers are willing to bear these additional costs.
Recycling – According to Adams Intelligence In 2023, nearly 21 tonnes of permanent magnets will be discarded in Europe in mobile phones, hard disk drives, traction motors for electric vehicles, wind power generators, MRI machines and hundreds of other applications. Of this amount, less than 000% is currently recycled per year, so there is still a long way to go before recycling helps reduce foreign dependence on rare earths.
Diversification of the offer – The key question is how quickly alternative supplies can be found. Diversification requires careful consideration. For example, the Democratic Republic of Congo, which exports 70% of the world's cobalt supply, is an unstable country that could jeopardise supplies. In addition, China owns 70% of the mines in the Democratic Republic of Congo.
Does CRMA need a more agile fifth pillar? As described above, there are significant obstacles to implementing the first four pillars of the CRMA. Another issue is the timeframe – 2030 is still more than five years away. China's recent decision to stop exports of the rare earth metal antimony within weeks and the prediction of further restrictions in the future underline the need to adapt much more quickly to developments outside the EU.
Current prices for Antimony www.ise-metal-quotes.com
To this end, it may be time to think about a fifth pillar of the CRMA. This would include two key elements: First, an advisory body for EU decision-makers, composed of experts from industry, research institutes and government. This body would monitor both rapid developments and longer-term trends and make concrete recommendations. Second, the creation and maintenance of a strategic EU reserve of rare earths. This could include targeted market interventions for critical raw materials, partly based on the Advisory Board's recommendations.
It is clear that creating and funding such a pillar to complement the CRMA's existing strategy would require a lot of work. The author hopes that this article can stimulate further discussion and progress on this important issue.
Conclusion: Time for a greater awareness of the urgency
The EU Critical Raw Materials Act is an important step forward to protect Europe from dangerous dependence on other nations for raw materials. However, as outlined above, there are challenges in implementing the CRMA. The 2030 timeframe is also challenged by the increasing speed and scope of export restrictions from China. In short, are we adapting quickly enough to the changing external environment to secure Europe's technological and industrial future?
ISE AG – August 2024
