Brussels [Belgium], November 12: As Beijing announced a two-month extension to its rare earth export control pause, European industry insiders welcomed a positive change of mindset in the bloc's efforts to reduce its dependency on imports of rare earths and other raw materials but cautioned that problems remained, especially in financing and regulations, while analysts warned the EU was running out of time.
On Monday, the Ministry of Commerce in Beijing extended a pause on export controls covering several rare earths and related technologies, as well as lithium batteries and synthetic graphite anode material, until January.
While European companies welcomed the extension, because it would give them some breathing space, it further highlighted the need for Europe to diversify its rare earth supply to ensure predictable and continued access, said Bernd Schaefer, CEO of EIT RawMaterials, a European Union co-funded group of companies, universities and research institutes in the raw materials sector.
He said that even if Europe had woken up to the need to diversify and the European Commission had put in place a policy framework, namely the European Critical Raw Materials Act and the RESourceEU Action Plan, the bloc still faced various challenges at the execution level.
"Brussels has, of course, certain targets . but the member states in Europe . are acting in a rather self-determined way," Schaefer said, adding that it was "a different level of complexity" compared with the system in China, where Beijing determined the direction through a long-term plan and everyone followed.
Other challenges included local communities' environmental concerns about mining or processing facilities and different member states' social and environmental regulations, he said.
Some of the troubles stemmed from decades of offshoring of raw materials production to China, which had grown to dominate mining, processing and pricing, Schaefer said, making it hard for investors to assess when a project in Europe would pay off.He said the lack of an independent and transparent European pricing system for critical raw materials was a key issue holding back the sector.
Around 14 critical rare earth oxides, as well as other raw materials such as gallium and germanium, were "not even priced in Europe", Schaefer said.
What existed in Europe were "so-called" prices that could be between three and 20 times Chinese domestic prices, and they were not market prices determined by transactions between buyers and sellers, he said, adding they were instead set through interviews and communications.
Source: Qatar Tribune
