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Learn about China's export restrictions on rare earths

The global manufacturers are concerned about China's decision on the export of rare earth alloys, mixtures, and magnets.

This is a brief overview of China's policies on rare earths.

What are they?

The rare earths consist of 17 elements that are silvery white. Magnets are used to power cars, mobile phones, missiles, and other electronic devices.

ARE THEY RARE?

Although they are not uncommon in the strict sense, they usually occur in small amounts or in mixtures with other minerals making their extraction expensive and difficult.

Which country is the largest producer?

China produces 90% of rare-earth magnets. It mines 60% of the rare-earths in the world. It has set quotas for output, smelting and separation. These are monitored to gauge global supply.

Why does China dominate production?

Separating rare earths is one of the hardest processing steps.

In the 1950s U.S. scientists developed a solvent extraction process, but radioactive waste in the United States made it unpopular.

China, pushed by its government, has been expanding the industry ever since the 1980s. It has spent the last 30 year mastering solvent extraction. Cheap labour and lax environmental regulations give it an advantage in terms of cost.

China has banned its technologies of separating rare Earths and producing magnets.

There are new separation technologies being developed, but they are not widely used yet.

What export restrictions has China imposed?

China added seven rare earth metals to its export control list on April 4. This was two days after Donald Trump imposed the highest tariffs in American history.

Sources in the industry say that exporters must apply for a license, which can take up to two months. Shipments have been stopped at many Chinese ports while applications are processed.

As part of a temporary trade deal, U.S. Trade Representative Jamieson Greer stated that on May 13, China agreed not to impose any non-tariff measures after April 2. This includes the rare earth restrictions.

Greer said that China "slow-rolled" the removal of these items, while Trump claimed that China had violated their deal.

WHAT HAS CHINA SAYN ABOUT CURBS?

China claims that its export restrictions are "nondiscriminatory", and do not target any particular country. On Friday, the foreign ministry said to media that China is ready to discuss this issue with other nations.

What impact have the curbs already had?

The global automakers warned that rare earths were used in many key components such as power steering and automatic transmissions. This could lead to production delays. (Reporting and editing by Clarence Fernandez; Colleen howe)

(source: Reuters)