Latest news with #rareearthmetals
Yahoo
6 days ago
- Business
- Yahoo
EU Wrestles With China's Chokehold Over Crucial Defense Supplies
(Bloomberg) -- European metals traders are engaged in an increasingly frantic scramble to secure rare-earth metal supplies after it became all but impossible to directly source them from China. Trump Awards $1.26 Billion Contract to Build Biggest Immigrant Detention Center in US Why the Federal Reserve's Building Renovation Costs $2.5 Billion The High Costs of Trump's 'Big Beautiful' New Car Loan Deduction Salt Lake City Turns Winter Olympic Bid Into Statewide Bond Boom Milan Corruption Probe Casts Shadow Over Property Boom While defense manufacturers say they can rely on stockpiling and diversified supply chains to keep their operations running, with traders turning to the secondary market, the supply crunch may soon start to bite unless a solution is found. The seeds of this crisis were planted in early April, when Beijing cut off exports of critical minerals, such as terbium, yttrium or samarium, usedin missiles, satellites and fighter jets — and implemented a far more restrictive system to oversee their release. China holds a quasi-monopoly over the mining and processing of many critical minerals, and the country's ability to choose winners and losers has nudged leaders in Brussels towards an alarming realization, according to people familiar with their thinking: Europe's ability to protect itself relies heavily on China. 'Companies and politicians view this topic differently, and governments obviously have to look at the bigger picture,' said Jakob Kullik, a researcher studying metals supplies at the University of Technology in Chemnitz, Germany. 'That's why I would be careful about what companies report, because the market figures tell a different story.' There isn't a quick fix to securing Europe's critical mineral supply. While European Commission chief Ursula von der Leyen has vowed to respond firmly to what she has described as blackmail by China, a longer-term plan requires substantial investment and political will — neither of which the 27 member states are able to generate easily. Under the new licensing system, Beijing holds veto power over which countries and sectors can access its rare earths. Like other nations that supply dual-use materials, it also requires applicants to fill out questionnaires certifying what they will ultimately be used for. Since April, China has approved a total of 1,500 six-month licenses to individual companies, and rejected an EU request to grant multi-year licenses, according to European officials. While Chinese officials have eased off on export restrictions somewhat since a squeeze in April, that's still not enough to offer confidence to their European counterparts. EU officials have described the new system as cumbersome and unsustainable, and asked Beijing to eliminate its questionnaires, which could be used to gauge the contents and size of military arsenals. But they concede that little is likely to change. When EU and Chinese officials meet in Beijing this week to celebrate 50 years of diplomatic relations, rare earths will be a top agenda item — although expectations of any grand resolution are low. Some fear that China might use access to critical minerals as a way to extract concessions from the bloc on pending trade investigations or tariffs on electric vehicles, the people said. That's in part why some officials are pushing the EU to threaten China with restrictions on exports of French aircraft parts or semiconductor equipment from the Dutch chip equipment company ASML Holding NV, they added. But a tougher approach faces a multitude of challenges. There's no consensus within the bloc on how to counter China or how far possible retaliation should go, and the EU commission has also been undermined by member states negotiating directly with Beijing to secure deals for their own industries, the people said. Countries striking out on their own are following a trajectory set by the US, which decided to conduct its own talks with Beijing after rare earth imports came to a halt. That culminated in a trade truce in June, with the US agreeing to lower tariffs and remove export controls on chip design software, aircraft parts and ethane shipments in order to keep imports flowing. Total mineral exports rose to 3,188 tons in June, according to Chinese data, more than double the 1,238 tons in May. Some defense companies have started stockpiling components, while others have expressed confidence that their supply chains are sufficiently diversified. Yet some industry experts believe that firms are downplaying the situation or are failing to fully grasp how serious it may be. A more structural solution — such as getting companies directly involved in extracting and processing raw materials — remains risky and requires a kind of expertise that is all but lost within Europe. In the meantime, Chinese officials, aware that they have the upper hand, have adopted more blunt rhetoric towards their European and American counterparts. Chinese Foreign Minister Wang Yi told EU foreign policy chief Kaja Kallas earlier this month that Beijing doesn't want Russia to lose the war in Ukraine because the US would then shift its attention to China, according to people familiar with the exchange. China has said that it has played no role in the conflict in Ukraine and rebuffed accusations from the Group of Seven that it is supplying Russia with materials critical to sustaining its war effort. Should China further tighten restrictions on rare earth exports, it could not only hinder the EU's defenses against Russia. It would also highlight Beijing's leverage over the European defense companies that arm Ukraine — and China's ability to control the provision of weapons to Kyiv. As the geopolitical tradeoffs and risks become clearer, EU leaders are thinking more seriously about how to reduce the bloc's mineral dependency on China. The strongest legislation to date, the Critical Raw Materials Act, entered into force last year but has been criticized by industry for failing to pull together the necessary funding. The act includes proposals to create domestic supply chains for minerals and to recycle more rare-earth elements from used electronics. Traders agree that in order to make this work, significant financial incentives would be required, partly because sending electronic waste back to China is cheaper than recycling in the European Union. One potential role model for how Europe might de-risk is Japan, which was cut off from Chinese rare earth exports in 2010. Japan responded by tasking a government agency to invest in overseas mining operations, and has built up supply chains in places including Australia and France. If the situation with China continues to escalate, Europe may need to pursue a similar approach, said Kullik, the politics researcher. He suggested that the bloc should aim to build rare-earth processing plants on the continent with the long-term goal of developing strategic stockpiles. After that, he said, the EU would have to adopt its own protectionist measures. 'If a conflict really comes about,' he said, 'that would be the only logical solution.' --With assistance from Arne Delfs, James Mayger, Michal Kubala and Alberto Nardelli. 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Bloomberg
6 days ago
- Business
- Bloomberg
EU Wrestles With China's Chokehold Over Crucial Defense Supplies
European metals traders are engaged in an increasingly frantic scramble to secure rare-earth metal supplies after it became all but impossible to directly source them from China. While defense manufacturers say they can rely on stockpiling and diversified supply chains to keep their operations running, with traders turning to the secondary market, the supply crunch may soon start to bite unless a solution is found.
Wall Street Journal
15-07-2025
- Business
- Wall Street Journal
America's Biggest Rare-Earth Producer Makes a Play to End China's Dominance
FORT WORTH—At an industrial site in this Texas city, men dressed in head-to-toe protective gear dip giant ladles into a well of molten metal heated to 1,800 degrees Fahrenheit. They're making something the U.S. has hardly, if ever, produced at commercial scale in recent decades: rare-earth metals. The factory is the most visible mark of MP Materials' MP 7.56%increase; green up pointing triangle high-stakes, billion-dollar bet that an American company can take on China's dominance over the metals—and the magnets they power in everything from cars and smartphones to missile systems.
New York Times
05-07-2025
- Business
- New York Times
China's Rare Earth Origin Story, Explained
Rare earth metals were an afterthought for most world leaders until China temporarily suspended most exports of them a couple of months ago. But for almost half a century, they have received attention from the very top of the Chinese government. During his 27-year rule in China, Mao Zedong focused often on increasing how much iron and steel China produced, but seldom on its quality. The result was high production of weak iron and steel that could not meet the needs of the industry. In the late 1940s, metallurgists in Britain and the United States had developed a fairly low-tech way to improve the quality of ductile iron, which is widely used for pipelines, car parts and other applications. The secret? Add a dash of the rare earth cerium to the metal while it is still molten. It was one of the early industrial uses of rare earths. And unlike most kinds of rare earths, cerium was fairly easy to chemically separate from ore. When Deng Xiaoping emerged as China's paramount leader in 1978, he moved quickly to fix the country's iron and steel industry. Mr. Deng named a top technocrat, Fang Yi, as a vice premier and also as the director of the powerful State Science and Technology Commission. Want all of The Times? Subscribe.
Globe and Mail
02-07-2025
- Business
- Globe and Mail
Market Factors: Two ways the finance industry may not be acting in your interests
In this edition of Market Factors, I'll outline two market trends that could lead to risks for domestic investors and then discuss evidence that the U.S. onshoring trend is ahead of schedule. The diversion discusses a new report about etiquette coaches for Gen-Z employees and we'll look ahead to data releases for the coming week. There have been times when I've defended the finance industry from claims of venality here in the newsroom but today I will do the reverse and warn readers of two ways the industry may not be working in investors' interests. The first case involves gold. It is no secret that bullion is rallying – it's up 84.3 per cent in the past three years compared with 62.2 per cent for the S&P 500. The problem is that the quality of new issues and secondary offerings declines the longer the rally continues. Investors who don't already own gold are afraid of missing out and getting in too late. Investment bankers are well aware of this. Because bankers' fiduciary duty is to their corporate clients and not investors, the risk that investors buying newly issued stock receive lower and lower quality assets (in terms of balance sheets, operating risk or profitability for example) increases. China's threat to stop exports of rare earth metals brings up the second risk for Canadian investors. There is the possibility that investors will be approached with private deals (not backed by a major investment institution) to fund the mining of rare earth materials in the Canadian north. In these cases, investors should be aware that processing of many rare earth metals is extremely damaging to the environment – that is the main reason processing is done in loosely regulated China – and may not be permitted domestically. I would also like to remind investors that the Canadian north is vast and generally bereft of infrastructure. I don't doubt that a rich deposit of tellurium exists somewhere up there, but investors asked to help fund mining it should make sure there's a road within 500 miles and at least faint hopes of electricity and fuel. I may (or may not) have seen examples of poor-quality gold miner stock issuance and the selling of shares in highly speculative rare earth properties during my time in finance. I definitely believe investors should be careful about stock sales in both sectors. Morgan Stanley has released a report suggesting the U.S. onshoring trend is happening faster than expected, with industrial stocks already profiting. Morgan Stanley global director of research Katy Huberty publishes a weekly Charts That Caught My Eye report, highlighting her picks for the most interesting and relevant research issued at the (giant) company. In the most recent edition, Ms. Huberty cites a report from the industrials team noting that manufacturing construction starts are proceeding at twice the pre-Covid run rate. The average cost of new projects is now at a 12-month high. Analyst Christopher Snyder sees activity ramping higher in the next few months as tariff clarity clears the runway. Mr. Snyder's top reshoring picks are Eaton Corp. (ETN-N) and Rockwell Automation Inc. (ROK-N). Gizmodo cited a San Francisco Standard report describing the new phenomenon of etiquette coaches lecturing Gen Z employees on basic civility in the workplace. Stuff like showering regularly, not expecting a promotion to upper management after six weeks, to avoid asking the CEO to go get them coffee, that kind of thing. I can't figure out how much of this is true and how much is a meme. Like most people, I've heard the horror stories – one of the first featured a parent accompanying a Gen Z prospect to a job interview – but the anecdotes now are starting to sound like a running joke. Please forward any related firsthand experiences. I can be reached at sbarlow@ Looking for our updates on market movers, analyst actions, stock technicals, insider trades and other daily, weekly and monthly insight? Click here to visit our Inside the Market page. Elon Musk's companies are at risk as the billionaire reignites a feud with Donald Trump The biggest U.S. banks are are hiking dividends and announcing share buybacks after acing stress tests Dan Hallett has done a deep dive to find out whether covered call strategies actually do shine in flat markets The data calendar remains 'dog days of summer' light. Domestically the international merchandise trade result for May is out Thursday (a deficit of $5.98-billion expected) and the S&P Global Canada services PMI for June will be released Friday. No major corporate releases are on tap for the next week. The Americans are scrambling to get the important economic releases out before July 4. Thursday will see change in non-farm payroll for June (110,000 new jobs forecasted), average hourly earnings for June (a 0.3 per cent month-over-month rise expected) and ISM services index for June (50.7). Wholesale inventories for May will be announced on July 9th. See the full earnings and economic calendar here Are you a Canadian retiree involved in an investment club to help keep busy and boost your market knowledge? The Globe is doing a story on investment clubs for retirees. If you're interested in being interviewed about your club, e-mail reporter Brenda Bouw at: bbouw@ We look forward to hearing from you
