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Time of India
07-07-2025
- Business
- Time of India
China's rare earth export controls are good for Beijing, bad for business
China's export restrictions on rare earths brought parts of the global auto supply chain to a halt and U.S. President Donald Trump to the negotiating table. But at home, they're a big headache for companies already struggling with a slow economy. Beijing curbed rare earth and magnet exports in April in retaliation against U.S. tariffs, driving down magnet makers' offshore sales at the same time as they face pressure from a weak economy and tough times in one of their key markets - EVs. The pain for magnet makers is unlikely to ease soon, even after the U.S. announced a deal with China on June 27 to get rare earths flowing again. Any agreement would take time to implement, said Baotou Rare Earth Products Exchange, a state-backed trading platform, noting that inventory was piling up in warehouses, in a post on WeChat 12 hours after the deal was announced. The export curbs led to a 75% drop in magnet exports in the two months after the restrictions were imposed and forced several global auto makers to pause some production. Live Events The restrictions caused a "crisis" for some local magnet makers, the Baotou exchange, based in Inner Mongolia, one of China's rare earths hubs, said in May. While China produces 90% of the rare earth magnets used worldwide and consumes most of them, exports ranged from 18% to 50% of total revenue in 2024 among the 11 largest publicly listed magnet producers by capacity, public filings show. "Their sales are now being squeezed from both ends - disrupted exports and flagging domestic demand," said Ellie Saklatvala, head of metal pricing at commodities information provider Argus. "They have temporarily lost an important part of their customer base, with no certainty about when they will regain it." Rare earths are politically sensitive in China and few major listed rare earth companies have commented directly about how the controls will affect their business. However, two rare earth magnet producers told Reuters revenue is expected to fall this year, speaking on condition of anonymity given the issue's sensitivity. "It will have a huge impact on the export business, although it's hard to tell exactly how much of a loss we will suffer for now," said one of the rare earth magnet producers, requesting anonymity due to the sensitivity of the matter. Small- and medium-sized producers cut production by around 15% in April and May, according to another source with knowledge of the matter, who also declined to be named. EXPORT CURBS' IMPACT UNDERESTIMATED Much like U.S. chipmaker Nvidia, China's rare earth magnet makers are victims of their own importance. Caught in the geopolitical crossfire of Washington's tariffs and China's retaliation, share prices of the listed magnet makers slumped in April after the export curbs were announced. However, they have climbed off their lows over the past three months. The rebound does not appear to be based on any reasonable forecast of the industry's future, said Cory Combs, head of critical mineral research at consultancy Trivium China. "I can see various market outlooks, more or less negative depending on the assumptions, but none of them yield a sustainable rise in share price like we're seeing," he said. Many magnet makers are also private, so share prices only tell a limited story, he said. Many producers already faced weaker conditions at home, including a price war among electric vehicle makers, a key customer segment, that has seen manufacturers demand discounts from suppliers. In addition, the highly customised nature of many magnet products makes it hard to resell cargoes domestically, forcing magnet makers to store them during the wait for licenses, four sources said, also speaking anonymously. CHALLENGES MAY SPUR CONSOLIDATION Listed magnet maker Baotou Tianhe Magnetics Technology Co noted the export curbs in its annual report released in late April, and said its export revenue could decline if the international situation deteriorated. Yantai Zhenghai Magnetics said last week it had received export licenses and production was normal. It referred investors to its upcoming financial filings for specific operating results. However, a quick return to the previous status quo is unlikely if the rare earth controls are implemented in a manner similar to those on other critical minerals including germanium and antimony, according to Argus' Saklatvala. China imposed export controls on germanium and antimony over the course of 2023 and 2024. Despite being used mostly by civilian industries, which in theory should face few issues getting licenses, exports have still not recovered fully, customs data shows. Europe is receiving only a tiny fraction of the antimony it imported from China before export controls were imposed last September. The shortages are already causing major problems for lead-acid battery makers, commonly found in gasoline engines. "Looking at China's recent export controls on other critical minerals - such as antimony - it is clear that it can sometimes take longer than expected for exports to resume and normalise," Saklatvala added. The large amounts of information required by export license authorities are a permanent change for the industry that will add delays and costs for producers, said David Abraham, affiliate professor at Boise State University, in Idaho. "In some sense, there's no going back," he said. In an industry that has hundreds of manufacturers, the pressures could lead to consolidation, he said. "I do not know if Beijing sees that as a bad thing, because further consolidation is helpful for controlling and understanding where materials go."
New York Times
05-07-2025
- Science
- New York Times
China Has Paid a High Price for Its Dominance in Rare Earths
Chinese mines and refineries produce most of the world's rare earth metals and practically all of a few crucial kinds of rare earths. This has given China's government near complete control over a critical choke point in global trade. But for decades in northern China, toxic sludge from rare earth processing has been dumped into a four-square-mile artificial lake. In south-central China, rare earth mines have poisoned dozens of once-green valleys and left hillsides stripped to barren red clay. Achieving dominance in rare earths came with a heavy cost for China, which largely tolerated severe environmental damage for many years. The industrialized world, by contrast, had tighter regulations and stopped accepting even limited environmental harm from the industry as far back as the 1990s, when rare earth mines and processing centers closed elsewhere. In China, the worst damage occurred in and around Baotou, a flat, industrial city of two million people in China's Inner Mongolia, on the southern edge of the Gobi Desert. Baotou calls itself the world capital of the rare earth industry, but the city and its people bear the scars from decades of poorly regulated rare earths production. An artificial lake of sludge known as the Weikuang Dam, four square miles in size, holds the waste left over after metals are extracted from mined ore. During the winter and spring, the sludge dries out. The dust that then blows off the lake is contaminated with lead, cadmium and other heavy metals, including traces of radioactive thorium, according to technical papers by Chinese scholars. During the summer rainy season, the sludge becomes coated with a layer of water that mixes with poisons and thorium. This dangerous mix seeps into the groundwater underneath the lake. Want all of The Times? Subscribe.
Forbes
01-07-2025
- Business
- Forbes
2025 Energy Review: Why Global Carbon Emissions Are Still Climbing
The Bao Steel mill in the morning, in Baotou, Inner Mongolia, China. Baotou is an excellent example ... More of a one-industry town, and that industry is steel. Baotou is also notorious as a big polluter, mostly from the large Bao Steel factory. With Baotou sitting directly west of Beijing, much of Beijing's notorious smog and haze comes from cities such as Baotou, which lay directly west. (Photo by Ryan Pyle/Corbis via Getty Images) In late June the Energy Institute (EI) released the 2025 Statistical Review of World Energy, which was published previously for more than 70 years by BP. Here is the link to the full 2025 Statistical Review of World Energy. The Review confirmed that a troubling trend continues. Despite historic investments in renewables and net-zero pledges from nearly every major economy, global carbon emissions hit a record high in 2024. This article is the first in a series breaking down the key findings—and what they mean for the global energy sector. Defining Carbon Emissions: What's Included and Why It Matters The Review breaks down carbon emissions into several categories, but the most comprehensive metric is total carbon dioxide equivalents (CO₂-equivalent emissions). This includes emissions from energy use, flaring, industrial processes, and methane associated with fossil fuel production, transportation, and distribution. As defined in the Review, CO₂-equivalent emissions represent the sum of carbon dioxide from fossil fuels, flaring, and industrial processes—plus methane emissions converted into their carbon dioxide equivalent. This approach provides a fuller picture of each country's contribution to atmospheric carbon levels. While land use changes like deforestation are not included, the inclusion of methane—a far more potent greenhouse gas than CO₂—makes this a more accurate measure of atmospheric impact. Global Emissions Rise Again Despite Renewable Growth Global carbon emissions hit a new all-time high in 2024, reaching 40.8 billion metric tons of CO₂-equivalent emissions. That's up from 40.3 billion metric tons in 2023—an increase of 0.5 billion tons from the previous year, despite record investments in renewables and aggressive net-zero pledges from countries and corporations alike. The growth trend has continued at a relatively consistent rate since 2021. Global CO2-Equivalent Emissions 1990-2024. Over the past decade, global emissions have increased by nearly 1% per year on average, despite a growing list of international climate pledges. Although 2024 saw numerous headlines highlighting record growth in wind and solar—topics I'll explore in upcoming articles—the emissions data tells a clear story: clean energy is expanding, but not fast enough to keep up with rising global energy demand. Breaking Down the Big Three The three largest carbon emitters in the world are China, the U.S., and India. Together, they account for over half of all global emissions. However, they have taken very different paths over the past few decades. The Top Three CO2-Equivalent Emitters in 2024. Despite a 37% increase in population over the period, U.S. carbon emissions in 2024 were lower than they were in 1990. Over the past decade, they've declined at an average annual rate of 1.0%. No country has reduced its carbon output more this century. Since 2000, U.S. emissions have fallen by 913 million metric tons—far surpassing second-place Germany, which saw a 292 million metric ton decline. While it's true that the U.S. started from a higher emissions baseline, the scale of the reduction remains a significant achievement. The most significant reduction in U.S. carbon emissions began around 2007, driven by two key shifts: the shale gas boom, which made natural gas cheaper and led utilities to switch away from coal; and the rapid growth of renewable energy, which chipped away further at coal's dominance in the power sector. In contrast, China's carbon emissions have quintupled since 1990, rising by a staggering 8.8 billion metric tons since 2000 alone. In 2024, China emitted approximately 12.5 billion metric tons of CO₂—nearly 31% of the global total—more than the combined emissions of North America and Europe. Despite being the global leader in solar and wind deployment, China is also the world's largest consumer of coal. That contradiction—leading the clean energy buildout while still relying heavily on fossil fuels—helps explain why global carbon emissions continue to rise, even as renewables grow at record rates. India's emissions have also quintupled since 1990, with an increase of 2.2 billion metric tons since 2000—second only to China in absolute growth. In 2024, India emitted 3.3 billion metric tons, up 24% over the past decade. India's rising emissions are closely tied to economic development. As millions move out of poverty and into the middle class, energy demand increases. Much of that demand is still met by fossil fuels. India's situation reflects the biggest challenge of the global energy transition: how to decarbonize while still expanding access to affordable energy. Global Disparities A regional view of the data reveals deeper structural imbalances. Over the past decade: In addition to North America, Europe showed a clear decline in emissions, which fell an average of 1.4% per year over the decade. The European Union's emissions fell to 3.7 billion metric tons in 2024, down 15% from a decade earlier. Countries like Germany and the UK continue to make strong progress through a combination of policy, electrification, and energy efficiency. But that success is uneven. In Eastern and Southern Europe, emissions are flat or even rising, and economic pressures have delayed some planned coal phase-outs. While Europe is often heralded as a climate leader, its internal divisions show how difficult it is to maintain momentum across a diverse bloc of nations. These trends reflect varying levels of policy ambition, but also where population and economic growth are occurring. Much of the world's energy demand growth is from countries that are still building basic infrastructure, expanding transportation networks, increasing industrial output, and expanding the middle class. Final Thoughts: More Clean Energy, But Not Enough Subtraction The data suggest that the much-hyped energy transition is still happening too slowly to halt emissions growth. Wind and solar are scaling, but they're not yet replacing fossil fuels at the level needed to reduce total emissions. We're adding clean energy to the mix, but we're not yet subtracting fossil energy. That's why global emissions continue to rise, even as headlines trumpet climate breakthroughs. Until global demand growth levels off—or renewables begin displacing fossil fuels at scale—emissions are likely to keep climbing. Next in this series: A closer look at the carbon productivity of top emitters and what per capita data reveals about global differences in emissions and energy use.
The Guardian
26-06-2025
- Business
- The Guardian
The world wants China's rare earth elements – what is life like in the city that produces them?
Central Baotou, an industrial hub of 2.7 million people that abuts the Gobi desert in north China, feels just like any other second-tier Chinese city. Large shopping malls featuring western chains including Starbucks and KFC stand alongside street after street of busy local restaurants, where people sit outside and children play late into the evening, enjoying the relative relief of the cooler temperatures that arrive after dark in Inner Mongolia's baking summer. But a short drive into the city's suburbs reveal another typical, less hospitable, Chinese scene. Factories crowd the city's edges, with chimneys belching white plumes of smoke. As well as steel and silicon plants, Baotou is home to China's monopoly on rare earths, the metallic elements that are used in oil refining equipment and car batteries and that have become a major sticking point in the US-China trade war. More than 80% of China's rare earth reserves are in Baotou. Metals such as cerium and lanthanum are crucial for modern technologies ranging from smartphone screens to vehicle braking systems. Certain rare earths, such as samarium, are used in military-grade magnets, including by the US. That has made them a useful bargaining chip for Beijing in the trade war. China has long objected to Washington's embargo on the export of advanced semiconductors to China, and now appears to be returning in kind by cutting off western manufacturers from critical elements in their supply chain. In April, Beijing restricted the export of several rare earths, before agreeing to reinstate export licences for some of them after recent talks in London. The restrictions have already had global effects, with Ford temporarily closing a car factory in Chicago because of the shortage. On Monday, a Ford executive said the company was living 'hand to mouth' to keep its factories open. In a fiery speech last week, the president of the European commission, Ursula von der Leyen, accused China of 'weaponising' its dominance of the rare earths supply chain. Access to the commodities is reportedly top of the agenda for an upcoming EU-China summit. Rare earths have been central to life in Baotou since long before the region's geology made global headlines. The metals were first discovered in China in Bayan Obo, a mining district 150km north of Baotou, in the 1930s. But production did not ramp up until the 1990s, when China entered a period of rapid economic reform and opening up. Between 1990 and 2000, China's production increased by 450% to 73,000 metric tonnes. At the same time, production in other countries, namely the US, declined, giving China a near monopoly on the global supply. In 2024, the government's quota for rare earths production was 270,000 tonnes. The Bayan Obo mining district is now a closely guarded community of people living in the shadow of massive mines and their toxic waste products. Baotou's rich reserves of natural resources have been good for the economy. The city's GDP per capita is 165,000 yuan (£17,000), compared with the national average of 95,700 yuan, although locals grumble about an economic slowdown, which is affecting the whole country. According to state media, last year the industry generated more than 100bn yuan for the city for the first time. But the industry also has an environmental impact. Toxic, often radioactive byproducts of rare earths processing are dumped into man-made ditches known as 'tailings ponds'. One of the most notorious tailings ponds in the area is the Weikuang tailings dam, owned by the state-owned Baogang Group. For many years it was the world's biggest dumping ground for rare earths waste products. It was not properly lined and there were fears about its toxic contents seeping into the groundwater and towards the nearby Yellow River, a major source of drinking water for northern China. According to the Ministry for Ecology and Environment, a clean-up project of one of the Yellow River's tributaries in Baotou resulted in levels of ammonia nitrogen, a rare earths processing byproduct, decreasing by 87% between 2020 and 2024. In the 2000s and 2010s, investigations into the villages around Baotou revealed orthopaedic problems, birth defects and an 'epidemic' of cancer. Because microscopic rare earth elements can cross the blood-brain barrier and deposit in the brain, exposure has been linked to a number of neurological problems such as motor and sensory disabilities, and they can also affect the neurological development of foetuses in pregnant women. A study published in 2020 found that children in Baotou were particularly likely to be exposed to rare earth elements through road dust, something that the researchers described as a 'serious risk'. Another study found that the daily intake of airborne rare earths elements in mining areas was up to 6.7mg, well above the 4.2 mg level that is considered to be relatively safe. 'Large-scale extraction quite often proceeds at the expense of the health and well-being of surrounding communities, pretty much regardless of the context,' says Julie Klinger, an associate professor at the University Delaware who specialises in rare earths. Although the technologies to process rare earths in less environmentally harmful ways exist in theory, they are rarely used because of cost. 'I doubt they could maintain their production costs if they took such steps,' says Craig Hart, a lecturer at John Hopkins University who focuses on rare earths. Environmentalists note that part of the reason that China has been able to dominate global supplies of rare earths at competitive prices is because, as well as being rich in natural resources, it has also been willing to let poor, rural people bear the brunt of the toxic, dirty work. But now China wants to clean up its image. In 2022, state media announced that Baotou's major tailings pond had been transformed into an urban wetland. Birdwatchers could come and enjoy the pristine waters of the newly purified pond, which apparently attracted a range of migratory birds. When the Guardian visited the site of the new birders paradise, however, most of the site was blocked from view behind a newly built concrete wall. A peek over the wall revealed an expanse of arid mud. Around the area the demolished remains of the once notorious 'cancer villages' were scattered among rusting pipes and dilapidated warehouses. One overgrown, abandoned dumpling restaurant was the only evidence of the communities that used to live there. At the site of another village once cited locally as having particularly high cancer rates, a large silicon factory occupied the area. It's not clear where the residents have been moved to. A nearby, newly built complex of multi-storey apartment buildings appeared to be intended as housing for the relocated villagers, but few people roamed the streets. Local officials physically blocked the Guardian from speaking to any residents around the villages. Baotou's local government did not respond to a request for comment.
The Guardian
26-06-2025
- Business
- The Guardian
The world wants China's rare earth elements – what is life like in the city that produces them?
Central Baotou, an industrial hub of 2.7 million people that abuts the Gobi desert in north China, feels just like any other second-tier Chinese city. Large shopping malls featuring western chains including Starbucks and KFC stand alongside street after street of busy local restaurants, where people sit outside and children play late into the evening, enjoying the relative relief of the cooler temperatures that arrive after dark in Inner Mongolia's baking summer. But a short drive into the city's suburbs reveal another typical, less hospitable, Chinese scene. Factories crowd the city's edges, with chimneys belching white plumes of smoke. As well as steel and silicon plants, Baotou is home to China's monopoly on rare earths, the metallic elements that are used in oil refining equipment and car batteries and that have become a major sticking point in the US-China trade war. More than 80% of China's rare earth reserves are in Baotou. Metals such as cerium and lanthanum are crucial for modern technologies ranging from smartphone screens to vehicle braking systems. Certain rare earths, such as samarium, are used in military-grade magnets, including by the US. That has made them a useful bargaining chip for Beijing in the trade war. China has long objected to Washington's embargo on the export of advanced semiconductors to China, and now appears to be returning in kind by cutting off western manufacturers from critical elements in their supply chain. In April, Beijing restricted the export of several rare earths, before agreeing to reinstate export licences for some of them after recent talks in London. The restrictions have already had global effects, with Ford temporarily closing a car factory in Chicago because of the shortage. On Monday, a Ford executive said the company was living 'hand to mouth' to keep its factories open. In a fiery speech last week, the president of the European commission, Ursula von der Leyen, accused China of 'weaponising' its dominance of the rare earths supply chain. Access to the commodities is reportedly top of the agenda for an upcoming EU-China summit. Rare earths have been central to life in Baotou since long before the region's geology made global headlines. The metals were first discovered in China in Bayan Obo, a mining district 150km north of Baotou, in the 1930s. But production did not ramp up until the 1990s, when China entered a period of rapid economic reform and opening up. Between 1990 and 2000, China's production increased by 450% to 73,000 metric tonnes. At the same time, production in other countries, namely the US, declined, giving China a near monopoly on the global supply. In 2024, the government's quota for rare earths production was 270,000 tonnes. The Bayan Obo mining district is now a closely guarded community of people living in the shadow of massive mines and their toxic waste products. Baotou's rich reserves of natural resources have been good for the economy. The city's GDP per capita is 165,000 yuan (£17,000), compared with the national average of 95,700 yuan, although locals grumble about an economic slowdown, which is affecting the whole country. According to state media, last year the industry generated more than 100bn yuan for the city for the first time. But the industry also has an environmental impact. Toxic, often radioactive byproducts of rare earths processing are dumped into man-made ditches known as 'tailings ponds'. One of the most notorious tailings ponds in the area is the Weikuang tailings dam, owned by the state-owned Baogang Group. For many years it was the world's biggest dumping ground for rare earths waste products. It was not properly lined and there were fears about its toxic contents seeping into the groundwater and towards the nearby Yellow River, a major source of drinking water for northern China. According to the Ministry for Ecology and Environment, a clean-up project of one of the Yellow River's tributaries in Baotou resulted in levels of ammonia nitrogen, a rare earths processing byproduct, decreasing by 87% between 2020 and 2024. In the 2000s and 2010s, investigations into the villages around Baotou revealed orthopaedic problems, birth defects and an 'epidemic' of cancer. Because microscopic rare earth elements can cross the blood-brain barrier and deposit in the brain, exposure has been linked to a number of neurological problems such as motor and sensory disabilities, and they can also affect the neurological development of foetuses in pregnant women. A study published in 2020 found that children in Baotou were particularly likely to be exposed to rare earth elements through road dust, something that the researchers described as a 'serious risk'. Another study found that the daily intake of airborne rare earths elements in mining areas was up to 6.7mg, well above the 4.2 mg level that is considered to be relatively safe. 'Large-scale extraction quite often proceeds at the expense of the health and well-being of surrounding communities, pretty much regardless of the context,' says Julie Klinger, an associate professor at the University Delaware who specialises in rare earths. Although the technologies to process rare earths in less environmentally harmful ways exist in theory, they are rarely used because of cost. 'I doubt they could maintain their production costs if they took such steps,' says Craig Hart, a lecturer at John Hopkins University who focuses on rare earths. Environmentalists note that part of the reason that China has been able to dominate global supplies of rare earths at competitive prices is because, as well as being rich in natural resources, it has also been willing to let poor, rural people bear the brunt of the toxic, dirty work. But now China wants to clean up its image. In 2022, state media announced that Baotou's major tailings pond had been transformed into an urban wetland. Birdwatchers could come and enjoy the pristine waters of the newly purified pond, which apparently attracted a range of migratory birds. When the Guardian visited the site of the new birders paradise, however, most of the site was blocked from view behind a newly built concrete wall. A peek over the wall revealed an expanse of arid mud. Around the area the demolished remains of the once notorious 'cancer villages' were scattered among rusting pipes and dilapidated warehouses. One overgrown, abandoned dumpling restaurant was the only evidence of the communities that used to live there. At the site of another village once cited locally as having particularly high cancer rates, a large silicon factory occupied the area. It's not clear where the residents have been moved to. A nearby, newly built complex of multi-storey apartment buildings appeared to be intended as housing for the relocated villagers, but few people roamed the streets. Local officials physically blocked the Guardian from speaking to any residents around the villages. Baotou's local government did not respond to a request for comment.
