U.S. "Toothbrush Trade Restrictions" and China's Antimony Rules; MP's and Neo's Quarterlies; RE Expert Meeting; EV problems; Unholy St George & More Brazil Me-Toos; Myanmar
U.S. "Toothbrush Trade Restrictions" and China's Antimony Rules; MP's and Neo's Quarterlies; RE Expert Meeting; EV problems; Unholy St George & More Brazil Me-Toos; Myanmar
Rare Earth 16 August 2024 #154
Again another tit-for-tat in trade regulation
China employs a ‘kill the chicken to scare the monkey (杀鸡儆猴)’ strategy. Kill the chicken: With export licensing imposed on gallium and germanium, going by the first trimester 2024 numbers, a temporary de-facto embargo on Germany has been implemented. Antimony is next. We now deem it quite possible that China will do the same with rare earth - referring to them as dual-use goods with the known consequences.
Expecting a climbdown on either side would be entirely unrealistic. China will pursue its objectives, whatever the cost and consequences for its own people.
There won’t be a fast enough renewable energy transition and electrification of transportation without China, so carbon-neutral will need to be postponed. Also it will be a rocky road of replacing supplies from China with diversified supply chains, requiring substitution, shortcuts and quick-fixes.
But as Niccolò Machiavelli described already in “The Prince”, published in 1532 after his death: The end justifies the means.
//Politics
New dual use license requirements
China to restrict critical antimony exports as geopolitical tensions target weapons
Looking to tighten its grip on the global flow of critical materials amid rising tensions with Washington, Beijing will impose export controls on rare antimony metals, ores and oxides, as well as equipment for processing superhard materials like diamonds.
In an online statement on Thursday, the Ministry of Commerce and the General Administration of Customs said the move, effective September 15, will help China defend its national security and also fulfil its non-proliferation obligations.
Fu Qianshao, a retired PLA Air Force equipment specialist, said the move was clearly intended to make it harder for the US to produce weapons of war.
A spokesperson for the commerce ministry said “it is common international practice to implement export controls on items related to antimony and superhard materials,” adding that the ban does not target any specific country or region, and that exports would be permitted if they comply with regulations.
Common applications of antimony metal include its use as a hardener in lead for storage batteries, in alloys with lead and tin to improve properties for solders and bullets, as well as in semiconductor devices.
Antimony trioxide – the most important of the antimony compounds – is primarily used in flame-retardant formulations.
And the use of antimony trioxide as a clarifying agent in photovoltaic glass has been on the rise in the past years.
Let us add to that: The world’s largest producer, Hunan Gold Corp., China, only had an operating margin of 0.4% in 2023.
Here the link to the original “Announcement No. 33 of 2024 of the Ministry of Commerce and the General Administration of Customs on the Implementation of Export Control on Antimony and Other Items.”
For your convenience here a translation:
China’s related exports in 2023, going by the HS-codes mentioned in the original announcement:
HS-code 2617101000 zero exports in 2023,
HS-code 2617109001/2617109090: 3,700 t (US$11 mio) to India and 2,260 t (US$13 mio to Oman). No other exports.
HS-code 2830902000 zero exports in 2023
HS-code 8110101000, unwrought antimony, 5,240 t (US$62 mio):
HS-code 81101020 48 t (US$0.7 mio) to UK and 12 t (US$0.12 mio) to Netherlands. No other exports
HS-code 81102000 zero exports in 2023
HS-code 8110900000 zero exports in 2023
HS-Code 2825800010, the famous antimony trioxide flame retardant, 35,800 t (US$360 mio):
HS-code 29319000 trimethyl/triethyl antimony and other organic antimony compounds 225,000 t (US$1 billion) - NB we can’t identify what is antimony related and if all of the antimony compounds has the high purity that the restrictions would apply to:
HS-code 28500090 all kinds of hydrides, azides, silicides, borides, unclear what is antimony related and what is not. 4,900 t (US$83 mio):
HS-code 28539090 Other organic compounds, unclear what is antimony related. 25,000 t, US$14.6 mio):
HS-code 84798999 Other machines and mechanical appliances having individual functions. 394 mio pieces (US$6.7 billion), export to 217 countries, impossible to determine what would fall under this regulation.
HS-code 84799090 Parts of other machines/appliances. 437,000 t (US$2.3 billion, exports to 207 countries, impossible to determine what would fall under this regulation.
HS-code 90328990 Other Automatic regulating or controlling instruments & apparatus. 116 mio pieces (US$3 billion), exports to 199 countries, impossible to determine what would fall under this regulation.
HS-code 71049110 Diamonds, further worked, for technical use. 4.4 t (US$397 mio).
Impact
If all the above were to fall under the dual-use licensing, at maximum an impact of US$5 billion, based on 2023 numbers.
Where is antimony?
Antimony-containing ores of industrial value are limited. There are currently as many as 120 known antimony-containing minerals, but there are only 10 types of antimony minerals with industrial utilisation value and containing more than 20% antimony. Stibnite is the most important resource and antimony as by-product from gold.
China’s share of antimony world mine output is ca. 50%, followed by Tajikistan with ca. 25% (Chinese state-owned company JV with the Tajik president’s family).
China’s import
In 2023 China imported 35,000 t of antimony ores and concentrates. 25% from Tajikistan, 24% from Russia and 16% from Australia.
Replacing China
Given the ability to process antimony to required specifications, Australia, Turkey and Bolivia have significant potential for replacing China in western supply chains.
Another nail in the coffin of international trade
Commerce Proposes Restrictions on U.S. Persons’ Support for Foreign Military, Intelligence, and Security Services and Controls to Protect National Security and Human Rights
The proposed BIS rules build on existing Export Administration Regulations (EAR) restrictions on U.S. persons’[1] implement a provision of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2023,[2] originally authored via an amendment by Senator Ron Wyden (D-OR)[3]. These rules propose to implement the broadest expansion of presidential export control authority since the Export Control Reform Act (ECRA) was signed in August 2018. Specifically, as expanded by the NDAA for FY 2023, ECRA provides BIS with the authority to impose controls on the activities of U.S. persons, wherever located, relating to foreign military services, foreign intelligence services, and foreign security services. In amending ECRA in this manner, Congress sought to prevent U.S. persons from assist in foreign military, intelligence, and security services that threaten international peace and stability or spy on dissidents, journalists, and American citizens.
Trade lawyers Akin Gump sum up the proposed rules:
From a compliance program screening point of view, this proposed change will have the most significant impact on U.S. and foreign persons that export, reexport or transfer (in-country) U.S.-origin items that are not described on any control lists.
Thus, for example, a foreign person’s reexporting from abroad a U.S.-origin toothbrush (an EAR99 item) to China to an entity known to be a “military end user” would require a license even if the toothbrush would be used for purely non-military applications.
and
BIS also has the authority to inform U.S. and foreign persons that otherwise uncontrolled items could be for a restricted end-use or end-user—and that, because of the notice, a license is required to ship the items.
And a related license application is very unlikely to get approved. Franz Kafka is jubilating in his grave.
In Supplement No. 1 to Part 774 you will find rare earth products which may surprise you.
China’s main rare earth supply source
Resistance forces take control of two Chinese-backed joint ventures in Myanmar
In July, two separate People’s Defense Forces took control of the Alpha Cement factory in Mandalay region and the Tagaung Taung nickel mine in Sagaing region.
While Chinese rare earth projects in Myanmar are protected by local independence forces, will these forces turn on one another to grab lucrative businesses?
Geopolitical Dispatch reports on an internal coup in Myanmar.
Chinese foreign minister Wang Yi was in Myanmar. The Nikkei reports:
Fights between Myanmar's regime and armed ethnic groups have escalated over the past several months, resulting in the recent fall of the de facto northern capital, Lashio, and a key regional military command center to forces led by the Myanmar National Democratic Alliance (MNDAA). Clashes near the Myanmar-China border have alarmed Beijing, which has been pushing Min Aung Hlaing to hold long-delayed elections and even step aside for an interim leader, Nikkei Asia reported.
A hardline Communist and CPC Politbureau Standing Committee member advocating elections? Free, open and fair? What has he been smoking?
This is going on:
What does China really want from Myanmar?
There has been a subtle change in the external context of Myanmar's foreign policy -- including a series of private meetings in the region between representatives of the State Administration Council (SAC) -- the military government -- and the U.S. Most recently, a senior U.S. official and an SAC representative, a Burmese admiral, are reported to have met in June in Hanoi. These meetings happened without consultation with China.
China has been building a deep water port at Kyaukphyu along the coast of the Bay of Bengal. Kyaukphyu is also the terminus of a $1.5 billion oil pipeline and parallel natural gas pipeline running to Kunming in China’s Yunnan Province. The U.S. objective is probably to deny China access to the Indian Ocean via Myanmar - or at least make it difficult.
Singapore
Closing the net on money launderers with stricter laws
Parliament has passed stricter anti-money laundering laws, strengthening Singapore’s anti-money laundering (AML) and combating financial terrorism (CFT) regime.
The new laws allow government agencies like the Inland Revenue Authority of Singapore and Singapore Customs to share tax and trade data respectively with the Suspicious Transaction Reporting Office (STRO).
The STRO is Singapore’s financial intelligence unit and is under the Singapore Police Force.
The law was also amended to simplify how prosecutors can prove their cases regarding offences that happened overseas, especially when it can be challenging to get evidence from abroad.
The proposed amendments will also allow Singapore law enforcement to investigate money laundering cases involving environmental offences like illegal mining, waste trafficking and illegal logging, even if they do not occur in Singapore.
The amendments would allow them to investigate such cases, typically flagged by authorities from other jurisdictions.
She stressed that the amendment is another step in strengthening Singapore’s AML/CFT regime and it will not be the last.
This may also affect certain foreign companies’ trade offices in Singapore.
India
Govt announces plan for Rare Earth Element centre
Rajasthan is poised to establish a cutting-edge Rare Earth Element(REE) Excellence Centre, with the aim of harnessing the state’s most precious mineral resources. Anandhi, the mining secretary, on Tuesday announced the plan for this facility, which will support exploration, mining, and processing of REE. Although the exact location of the center is yet to be determined, officials suggest it will likely be in Udaipur.
The initiative is expected to attract industrial investment, create job opportunities, and stimulate technological development within the state,” Anandhi stated.
Initial signs of REE deposits have been found in various districts, including Barmer, Jalore, Sirohi, Pali, Udaipur, Bhilwara, Nagaur, Ajmer, Jaipur, Neem Ka Thana, Rajsamand, Sikar, and Banswara. Key REE minerals such as Bastnasite, Brittleite, Synchysite, and Xenotime have been identified in local carbonatites and microgranite rocks.
India’s coastline is teeming with HMS deposits, containing plenty of monazite. What is the point in starting early exploration of rare earths, rather than using what is already out in the open?
IREL already produce separated rare earth products.
Without NdFeB and SmCo India is no alternative to China
Lacking the capability and capacity to produce rare earth permanent magnets, India can’t ever be an alternative to China.
Due to its legendary government inertia and notorious sub-snail speed, India is not likely to get anywhere in rare earth permanent magnets during the first half of this century.
Looking for cheap solutions to expensive problems
More than 5 (five) years ago the Indian government had nudged major Indian conglomerates to acquire NdFeB know-how and build up production capacity.
All candidates wanted to get into rare earth permanent magnets as cheaply as possible. So, all kept looking for a cheap solution to an expensive problem, rather than moving fast and efficiently.
Then China slammed the door by banning the export of rare earth permanent magnet know-how, leaving India with exactly nothing. The alternative ‘solutions’ will be much, much more expensive.
Lost in translation
Zelensky ready to sign rare earth minerals agreement with U.S. - senators
Kiev stands ready to sign a large-scale agreement on rare earth minerals with the United States, U.S. Senators Richard Blumenthal and Lindsey Graham said in a joint statement following their visit to Ukraine.
"President Zelensky was excited about and was committed to obtaining a strategic agreement with the U.S. regarding the more than a trillion dollars-worth of rare earth minerals owned by Ukraine" and expressed a commitment to form a working group to put this plan into practice, the senators said.
Kirovohrad Oblast might have some rare earth potential.
More likely is, however, neither side knew what they were talking about and meant titanium, lithium, graphite and such, as evident from Senator Blumenthal’s news release:
“Expanding economic cooperation with Ukraine makes America stronger and accelerates Ukraine’s economic recovery. Ukraine is blessed with significant lithium, titanium, and other rare earth minerals that are needed by the American economy. An agreement with Ukraine in this area would make the U.S. less dependent on foreign adversaries for rare earth minerals.
Serbia: Protests over vast Rio Tinto lithium mining project
Tens of thousands demonstrated at key sites in central Belgrade on Saturday evening, calling for an end to a planned lithium mining project in western Serbia, saying it could pollute nearby agricultural land and water.
If implemented as planned, it's estimated that the $2.4 billion (roughly €2.2 billion) Jadar mine could cover 90% of Europe's current lithium needs and make Rio Tinto one of the world's largest lithium producers.
There you have it, EIT-Raw Materials/Mr Schaefer, this is your mining in Europe: A powerful display of “Not In My Backyard” (NIMBY).
Certainly some of the protesters traveled to the event in their own electric vehicles, batteries of which where made with materials that must have precipitated from outer space, so to fit the mentality of the EV owners.
Russophile Serbia has been seeking EU membership since 2009. Serbia’s gas and refinery sector is firmly in the hands of Russia’s Gazprom.
Nidec are planning an electric motor factory in Serbia, while Stellantis plan to build an EV factory there. Serbian company ElevenEs established a battery cell production already.
Local production of lithium compounds would be an important element of Serbia’s economy. But happily there are the NIMBYs, demanding environmental impact to occur out of sight, out of mind. Somewhere in Africa or South America, even in China - but not in my backyard.
More from the General Hostility Department
China warns office workers foreign spies can steal data via commonplace online software
China’s Ministry of State Security has warned office workers that online work tools can pose espionage risks, and that leaks have “occurred repeatedly” in recent years.
“Many online platforms gathered powerful ‘dark technology’ functions that combine both social and office work features,” the ministry said on its official WeChat account on Sunday.
Uploading confidential files to those platforms increased the risk for “overseas spying and intelligence agencies” to “steal” sensitive data and should be “strictly prohibited”, the ministry said.
China’s top spy agency warned government officials in June against storing classified information on cloud services because cloud data had become “a major focus of foreign spy agencies”.
Berating the obvious. “Clouds” are nothing else than servers somewhere on the internet. As you transfer data, there may be vulnerabilities.
Of course it is only ever the foreigners spying, while angelic Communists are exclusively on the receiving end.
Jack Lifton
The Case for Critical Minerals versus Military Metals
I don’t remember the exact date I first heard that “rare earths are critical for the military,” but it was before 2010, and the source was the advertising (aka announcements) coming from the then newly revived Molycorp, the anchor company of the then-burgeoning rare earth boom. I cannot recall any confirmation of that statement by the U.S. Dept of Defense until recently, but I do recall a 2013 paper coming out of the D.C. bureaucracy stating that “military demand” was “about” 1000 tons per year of “rare earth permanent magnets.”
That was 14 years ago. And where do they stand today? Head across and read it.
//New Energy
Hydrogen
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