China Bans Rare Earth Metal Technology Export

Context:

China has recently implemented a ban on the export of technology crucial for the extraction and separation of Rare Earth Metals. This includes production technology for rare earth metals and alloy materials, as well as technology related to the preparation of certain rare earth magnets. The decision is part of an overhaul of technologies considered vital for national security. This move by China has significant implications as Europe and the United States strive to reduce dependence on rare earths sourced from China, which currently dominates 90% of the global refined output.

Relevance:

GS I: Geography

Dimensions of the Article:

1. What are rare earths?
2. What are rare earths used for?
3. Rare Earth Minerals Reserves – India Ranks 3rd in the World
4. Global Ramifications of Rare Earth Export Technology Ban
5. Impact on India

What are rare earths?

• Rare earth elements or rare earth metals are a set of 17 chemical elements in the periodic table — the 15 lanthanides, plus scandium and yttrium, which tend to occur in the same ore deposits as the lanthanides, and have similar chemical properties.
• The 17 rare earths are cerium (Ce), dysprosium (Dy), erbium (Er), europium (Eu), gadolinium (Gd), holmium (Ho), lanthanum (La), lutetium (Lu), neodymium (Nd), praseodymium (Pr), promethium (Pm), samarium (Sm), scandium (Sc), terbium (Tb), thulium (Tm), ytterbium (Yb), and yttrium (Y).
• Despite their classification, most of these elements are not really “rare”.
• One of the rare earths, promethium, is radioactive.

What are rare earths used for?

• These elements are important in technologies of consumer electronics, computers and networks, communications, clean energy, advanced transportation, healthcare, environmental mitigation, and national defence, among others.
• Scandium is used in televisions and fluorescent lamps, and yttrium is used in drugs to treat rheumatoid arthritis and cancer.
• Rare earth elements are used in space shuttle components, jet engine turbines, and drones.
• Cerium, the most abundant rare earth element, is essential to NASA’s Space Shuttle Programme.
• In recent years, rare earths have become even more important because there has been an increase in demand for green energy.
• Elements like neodymium and dysprosium, which are used in wind turbine motors, are sought-after more than ever as wind mills across the world continue to grow.
• Moreover, the push for switching from internal combustion cars to electric vehicles has also led to a rise in demand for rare earth magnets — made from neodymium, boron, and iron — and batteries.

Rare Earth Minerals Reserves – India Ranks 3rd in the World

• India has the third-largest reserves of rare earth minerals in the world. Due to radioactivity of monazite sands, Indian Rare Earths Ltd under the Department of Atomic Energy is the sole producer of rare earth compounds.
• Globally, China has a monopoly over rare earth, after USA’s recede in this industry due to high environmental and health concerns.
• China had once, almost shivered the Japanese economy by halting the export of rare earth elements.
• India is also blessed with some crucial rare earth minerals like zirconium, neodymium etc., available in plenty in monazite sands.
• This could contribute to Indian export markets if utilized properly. However, owing to various reasons such as cost reduction due to high production (economies of scale) in China, lack of demand in the domestic market, lack of domestic processing technologies, the production of rare earth minerals has depleted over years.
• Most of the products that use rare earth minerals as raw materials are imported. Despite rare earth minerals having high value add the potential for export growth, inadequate processing technologies have made India suffer.

Global Ramifications of Rare Earth Export Technology Ban

Disruption to Global Supply Chains:

• China’s role as the leading processor of rare earths makes the technology export ban a potential disruptor for global industries dependent on these materials.
• Countries and industries relying heavily on Chinese rare earth exports may encounter shortages or increased costs.

Vulnerability of Dependency on China:

• The ban highlights the vulnerability of nations heavily reliant on China for critical materials.
• Dependence on a sole source raises concerns about supply security, urging nations to explore alternative supply chains or domestic production.

Incentive for Innovation and Diversification:

• The ban could stimulate innovation and investments in alternative technologies and supply sources outside China.
• Countries may actively seek to diversify their rare earth supply chains, reducing reliance on a single market.

Impact on India

Opportunity for Reassessment and Diversification:

• India, similarly dependent on Chinese rare earth exports, has an opportunity to reassess its reliance and explore diversification strategies.
• Focus on developing domestic extraction and processing capabilities or forming partnerships with other nations becomes crucial.

Initial Disruptions and Long-Term Mitigation:

• Industries in India reliant on rare earth materials may face initial disruptions due to potential supply constraints.
• However, this scenario could prompt investments in domestic production or collaborations with alternative suppliers, mitigating long-term risks.

Abundant Rare Earth Resources:

• India’s Rare Earth (RE) resources, reported as the fifth largest globally, provide a solid foundation for potential development and self-sufficiency in rare earth production.

-Source: The Hindu