Focus on Arts and Ecology

17-23 May, 2019

This week the clean technology industry was shaken by an unspoken threat from China to restrict its export of rare earth minerals and components as the trade war escalates. On May 20, President Xi Jinping paid a highly publicised visit to a magnet company in Jiangxi province that uses rare earth minerals, effectively delivering a message about China’s dominance in the industry. China is the world’s largest miner of rare earth minerals by a wide margin, according to the South China Morning Post(SCMP); it also leads the production of components made from rare earths.

The global cleantech industry uses these components widely in products ranging from electric vehicle batteries to wind turbine magnets. Caixin Energy reports that stock prices for rare earths and related business surged this week after Xi’s visit, foreshadowing supply chain impacts if China does decide to restrict exports. An analyst told SCMP that, regardless, China is likely to use more of its supply of rare earths domestically as demand from the booming electric vehicle industry picks up.   
Although China still dominates the rare earth industry, it actually cut back domestic production starting in 2017 after environmental inspections shed light on the industry’s impacts, according to Caixin Energy. China now imports a large portion from Myanmar. The analyst also told SCMP that potential restrictions are already producing an unintended environmental benefit: businesses worldwide are looking to improve their rare earth recycling capabilities in case of a supply shortage from China.  

Read chinadialogue’s earlier coverage of the environmental and economic implications of China’s rare earth industry.