China’s Rare Earth Export Curbs Impact Auto Industries Globally- Indian, Japanese And European Delegates To Discuss Future Changes Soon! News24 –
The acute shortage of rare earth minerals has left the automotive industry in a predicament, a report by Reuters has revealed that some European auto parts plants have suspended output and beyond that, manufacturing giants such as Mercedes Benz are considering ways of protection against such sudden shortages of rare earth minerals. The primary reason behind such issues has been the restrictions laid out by China on critical mineral support which are a necessity for new EV Production across the globe.
China’s decision to suspend the exports of a wide range of rare earth minerals and related magnets has caused major hindrances for automakers and also affected the global supply chains of necessary components for EV battery production. EV production is not the only dynamic that has reported such issues aerospace manufacturers, Semiconductor companies and Military contractors around the world have been witnessing similar issues as well.
China’s dominance of the critical mineral industry, a key to green energy transition, has been serving as a out as a key leveragein its response towards the trade war initiated by US President Donald Trump. According to a Reuters Report, China has a key majority in supplying key earth minerals and China produces about 90% of the World’s Rare Earth Minerals. While the decision could be directed towards US and their Tariffs, automotive industries around the world have been witnessing the brunt of the issue. Manufacturers such as Mercedes Benz are actively working towards the creation of a buffer stock of such materials to protect themselves against such issues.
List of Critical Earth Minerals
The Critical materials whose supplies have been halted includes materials like, Samarium, Gadolinium, Terbium, Dysprosium, Lutetium, Scandium, and Yttrium. An earlier report from Reuters had also indicated that Industry executives from India, Japan and Europe are urgently seeking to meet and hold a discourse with Chinese officials to expedite stalled export licenses. A Japanese business delegation is expected in Bejing in June.
A resolute solution for such issues Ministry of heavy industries is preparing a stakeholder meeting to discuss the formation of a Domestic rare Earth Magnet Industry. Proposals under consideration as a per an economic times report have been Public-Private partnerships and Production Linked Incentives. This is not the first time that China has used such tactics, in 2010 China had briefly cut off exports to Japan During a territorial dispute. Since Japan had already witnessed such situations over the year’s it diversified its sources and invested in supply sources and refining factories aboard.