Goldman Sachs experts warn of increasing risks to global supply chains of rare earth metals and critical minerals due to China’s dominance in this area. Analysts emphasize that countries are facing significant challenges in their attempts to establish independent systems for the extraction and processing of these resources.
This is reported by Finway
China Tightens Control Over Rare Earth Element Exports
According to specialists, China currently controls 69% of global rare earth metal production, 92% of global processing, and 98% of magnet production. This level of concentration creates vulnerabilities for other nations to political or economic decisions from Beijing. On October 9, China expanded its export restrictions on rare earth elements, adding five more items to the list and tightening control over the use of strategic materials in the semiconductor industry.
“Rare earth elements (REEs) are critically important for high-tech industries. A shortage of just 10% in sectors dependent on REEs could lead to economic losses of $150 billion and exacerbate inflationary pressure, experts predict.”
Analysts forecast that Beijing may extend export restrictions to light rare earth elements, where its dominance is also absolute. This reinforces the global economy’s dependence on China.
The USA and Australia Form New Supply Chains
In light of growing threats, the USA and Australia have signed a strategic agreement worth $8.5 billion, under which Canberra will supply Washington with rare earth minerals. As part of this agreement, the parties plan to invest over $3 billion in “critical projects” for mineral extraction over the next six months. The total value of the mining resources within the agreement is estimated at $53 billion. Australia, possessing the fourth-largest reserves of rare earth minerals in the world, aims to become a key alternative supplier for the USA.
Additionally, Turkey is also considering the possibility of collaborating with the USA on the development of its own large deposits of rare earth minerals. Turkish President Recep Tayyip Erdoğan announced that 694 million tons of such elements have been found in Eskişehir province, and the country intends to begin extraction independently or with international partners to become one of the top five producers of rare earth elements in the world.