https://sputnikglobe.com/20230803/chinas-rare-earth-metals-ban-hits-us-chip-trade-restrictions-where-it-hurts-1112340326.html
China's Rare Earth Metals Ban Hits US Chip Trade Restrictions Where It Hurts
China's Rare Earth Metals Ban Hits US Chip Trade Restrictions Where It Hurts
Sputnik International
Peter Arkell, chairman of the Global Mining Association of China, said that China's restrictions on the export of rare earth metals were a predictable response to Washington's trade war.
2023-08-03T05:17+0000
2023-08-03T05:17+0000
2023-08-03T05:17+0000
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China's curbs on rare earth metals to Western microchip makers comes as no surprise after a year of US-led sanctions, says a mining expert.Beijing's new restrictions on the export of eight gallium and six germanium products, on the basis that they have dual civilian and military uses, came into force on Tuesday.China is the world's leading producer of those two elements, which are used in the manufacture of microchips. That followed a year of efforts by Washington to cut off China's access to high-grade chips and the machines to manufacture them, under the pretext of US "national security."Global Mining Association of China Chairman Peter Arkell told Sputnik that the PRC's response to the US embargo was no surprise.Exporters will now have to apply for special licenses, which could take up to two months to approve. Traders were unsure whether the government would limit the number of permits granted.Since other nations reportedly only have enough stockpiles to last two or three months, Beijing's measures could cripple semiconductor production in the rest of the world just when demand is on the rise as Western nations struggle to ramp up production of guided missiles and other arms.The mining expert said the export restrictions would be particularly effective as there was no realistic alternative source for manufacturers.The industry official warned that the latest escalation of the trade war between Washington and Beijing would cause serious global supply shortages and drive up the price of the minerals. Some media have reported that the US is now turning to Mongolia for alternative sources of the metals. Arkell called that prospect a "pipe dream", but if that is the case, "it has many risks." The expert added that while there were many potential sites of gallium and germanium mining around the world, China remained the dominant player in processing the metals. "And let’s not forget that Mongolia is a landlocked country surrounded by Russia and China," he added.
https://sputnikglobe.com/20230801/chinas-rare-earths-ban-may-sink-us-microchip-manufacturing-ambitions-1112322954.html
https://sputnikglobe.com/20230703/youve-had-your-chips-netherlands-bans-sale-of-microchip-tools-to-china-1111637174.html
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us embargo on microchip exports to china, chinese rare earth metals production, chinses restrictions on exporting gallium and germanium
us embargo on microchip exports to china, chinese rare earth metals production, chinses restrictions on exporting gallium and germanium
China's Rare Earth Metals Ban Hits US Chip Trade Restrictions Where It Hurts
Peter Arkell, chairman of the Global Mining Association of China who has been running a consulting business in the PRC for almost 20 years, said that Beijing's restrictions on the export of rare earth metals were a predictable response to Washington's trade war.
China's curbs on rare earth metals to Western microchip makers comes as no surprise after a year of US-led sanctions, says a mining expert.
Beijing's new restrictions on the export of eight gallium and six germanium products, on the basis that they have dual civilian and military uses, came into force on Tuesday.
China is the world's leading producer of those two elements, which are used in the manufacture of microchips. That followed a year of efforts by Washington to cut off China's access to high-grade chips and the
machines to manufacture them, under the pretext of US "national security."
Global Mining Association of China Chairman Peter Arkell told Sputnik that the PRC's response to the US embargo was no surprise.
"With roughly 90 percent of global production of these minor metals, gallium and germanium, China has hit the American CHIPS trade restrictions where it hurts," he said. "It seems to be a pretty fundamental trade negotiation tactic."
Exporters will now have to apply for special licenses, which could take up to two months to approve. Traders were unsure whether the government would limit the number of permits granted.
Since other nations reportedly only have enough stockpiles to last two or three months, Beijing's measures could cripple semiconductor production in the rest of the world just when demand is on the rise as Western nations struggle to ramp up production of guided missiles and other arms.
The mining expert said the export restrictions would be particularly effective as there was no realistic alternative source for manufacturers.
"Gallium and germanium are just a couple of the minor metals that are so important for the range of tech products, and China is the dominant producer of most of these metals," Arkell explained. "It is a fantasy to suggest that another country can replace China in the short or even medium term."
The industry official warned that the latest escalation of the trade war between Washington and Beijing would cause serious global supply shortages and drive up the price of the minerals.
"This will, in turn, have an impact on the global supply chain and the price of chips from the basic to most complex," Arkell said. That would hurt China less as, although it is forced to import the most sophisticated chips, "China is a producer of microchips and its industry will not be hampered to the same extent by gallium and germanium supply restrictions."
Some media have reported that the US is now turning to Mongolia for alternative sources of the metals. Arkell called that prospect a "pipe dream", but if that is the case, "it has many risks."
"The reason that China has such a dominant position in the production of rare earths is because they have invested over decades in the technology," he said. "The rest of the world has been happy to leave this processing to China because environmentally it is especially tricky and the developed world has been content to have these facilities 'not in their backyard'."
The expert added that while there were many potential sites of gallium and germanium mining around the world, China remained the dominant player in processing the metals.
"For decades China has built its mineral processing capability in a range of critical minerals. These processes come at significant cost, financial and environmental," Arkell noted "The world has been comfortable leaving those risks with China and to take delivery of product for their tech industry."
"And let’s not forget that Mongolia is a landlocked country surrounded by Russia and China," he added.
