China's dominant position and export restrictions
Europe is heavily dependent on China for rare earth metals that are crucial for the manufacture of permanent magnets in cars, wind turbines and defence equipment, among other things. Earlier this month, it was announced that China had imposed additional export restrictions on these metals. According to experts, this will lead to higher costs, longer delivery times and possible production problems in Europe, as reported in an article in the NRC (in Dutch).
New export restrictions
With these new export restrictions, China is using its dominant position as a geopolitical weapon, mainly in response to the US-China trade war. The measures are hitting Europe hard and emphasise the need to become less dependent. ‘In addition to high prices, this time there could also be production stoppages – because the situation is so acute,’ says Andor Lips, raw materials expert at the NMO, in the newspaper.
Search for alternatives
Europe wants to become less dependent through its own mining projects, subsidies and the promotion of recycling, as laid down in the Critical Raw Materials Act. However, European reserves are limited; discoveries in Norway and Greenland offer cautious prospects. An important alternative is scrap recycling, but Lips warns that this takes time and the technology is not yet set up on a large scale. According to Lips, recycling always lags behind the ever-growing demand for rare earth metals. He thus underlines the importance of innovation and investment in recycling technology.