The fear of a global supply chain disruption for rare earths has further intensified. Automobile manufacturers have launched a global search to secure rare earth supplies ahead of China’s November 8 export control deadline, according to Reuters.
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Rare earth elements like neodymium, dysprosium, and terbium are vital for producing high-performance magnets that are widely used in automobiles, especially electric vehicles (EVs). These magnets play key roles in making sensors for braking and fuel leakage, speakers and pumps, and even other parts controlled by a vehicle’s electric motor systems, such as side mirrors and windshield wipers.
However, leaders of global carmakers believe that China’s approaching export control could lead to a worldwide supply shortage, according to the outlet. The concern comes as China appears to be sidestepping arrangements entered earlier this year with the Trump administration and targeted at relaxing curbs on the export of the materials.
China Expands Control amid Trade Tension with U.S.
According to media reports, China, the world’s biggest producer and refiner of rare earth elements, in September started to toughen the export license application process for the materials. Earlier in June, China had issued temporary rare earth export licenses to suppliers of three top automaker brands: General Motors (GM), Ford (F), and Stellantis (STLA).
Meanwhile, China earlier this month also announced plans to limit the export of lithium battery parts, which are also critical components of electric vehicles. However, the U.S. is also working towards reinforcing the country’s reserve of these materials to reduce its reliance on China.
This is even as America looks to trim approval times for new mines and relax environmental limits on their construction. Moreover, the U.S. has just struck an $8.5 billion critical minerals deal with Australia, in this regard.
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The U.S.-China trade tension has continued to intensify, with ripple effects on the automobile industry, particularly EV producers.
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