[Text/Observer Network Xiong Chaoran] Recently, China has introduced new rare earth regulations, and the effective implementation date is approaching. Reuters reported on October 21, local time, that at present, global automakers are stepping up their search for key rare earth resources around the world to cope with China's export controls. Industry executives worry that these measures could lead to parts shortages and even force factories to shut down production.

According to the report, although the previous "trade truce" between China and the United States temporarily eased the threat to supply, China also introduced similar rare earth export controls earlier this year, which exhausted the inventories of manufacturers. In addition, China has now significantly expanded the scope of export controls, and there is an export licensing system.

"The situation is very tense," said Nadine Rajner, chief executive of German metal powder supplier NMD, and customers now want to source rare earths from anywhere except China. However, she admitted that although countries such as Sweden have abundant rare earth resources, they lack enough mining or refining capacity to make them available. For heavy rare earths, China controls 99.8% of the world's refining capacity, so there are few alternative sources.

Reuters pointed out that although China has also implemented export controls on batteries and battery materials, the "Anse Semiconductor Incident" between China and China has also caused a crisis in the automotive chip field, and the high U.S. tariffs continue to spread a threat, but for the automotive industry, China's grasp of rare earth elements is "one of the most difficult problems".

"They can shut down our entire auto industry in two months."The Toyota car.Ryan Grimm, vice president of North American Supplier Procurement Development Group, said.

Rare-earth supply is critical to the production of automobiles and their parts

It is that rare earth magnets provide power to motors in car parts, including rear-view mirrors, speakers, oil pumps, rain scrapers and fuel leakage and braking sensors, and in electric vehicles, the importance of rare earth magnets is more prominent.

Consultancy AlixPartners estimates that China controls as much as 70% of global rare earth mining, 85% of refining capacity and about 90% of rare earth metal alloys and magnet production.

The latest list of Chinese export controls also includes elements such as uranium, uranium and uranium, which are also used in automotive manufacturing.

Bruno Gahery, president of auto parts supplier Bosch's France, Benelux (Belgium, Netherlands, Luxembourg), and Western and Southern Europe, said he expected major companies in the auto industry to "accumulate large quantities of rare earths" before China's new export control rules come into effect.

However, an executive of a company that supplies rare-earth magnets for modern cars revealed that while the company had established inventories earlier this year, ¡°most of it has been consumed,¡± the supply remains very tense.

Three other industry sources told Reuters that since China announced new export control measures on October 9, some Chinese rare earth exporters immediately received urgent orders from overseas customers. However, even if Chinese suppliers can complete new orders before export controls take effect on November 8, it may take 45 days to ship to Europe. The shortage of rare earths is still a problem facing the automobile industry.

Rare Earth can be recycled through waste cars, Reuters said, but the industry is still in its early stages.Neutral, a Renault-backed company, currently recycles rare earth from around 400,000 cars annually in France and has signed contracts with 15 European brands.

"But the challenge is how to scale up these activities," said Jean-Philippe Bahuaud, CEO of Neutral.

According to reports,GMand major auto parts suppliers ZF andBorgWarnerCompanies such as BMW and Renault are also developing low or zero-rare earth engines, while BMW and Renault have produced zero-rare earth engines.

British startup Monumo uses artificial intelligence and deep technology simulations to help customers reduce the use of rare earth in existing engines, said Dominic Vergine, the company¡¯s CEO, said the technology has helped customers, including several of the world¡¯s top ten automakers, reduce the use of rare earth by an average of 24%.

In addition, automotive manufacturers are also working hard to improve the next generation of electric vehicles¡¯ zero-earth engines, however, industry experts point out that mass production of these engines will still take years, and plans to develop new rare-earth mines and processing plants outside of China are also facing the same long cycle.

"This is not going to be the end of export controls." Jan Giese, senior manager of rare earths trading company Tradium, said China was expected to continue to exert influence over rare earths supply.

On October 15, China Foreign Ministry spokesperson Lin Jian said that China's competent authorities have clarified their position on the policy of rare earth export control, and China's position is consistent and clear. On the other hand, the United States threatened and intimidated, imposed high tariffs, and introduced new restrictions while talking. This is not the right way to deal with China.

He Yongqian, spokesperson of the Ministry of Commerce of China, pointed out on October 16 that China's recent introduction of rare earth export control measures is a legitimate way to improve its own export control system in accordance with laws and regulations. The purpose is to prevent the illegal flow of rare earths to improper uses such as weapons of mass destruction, and better safeguard China's national security and global common security.

The US side recently claimed that China's measures will have a broad impact on the world's semiconductor, artificial intelligence, smartphone and other industries.Huawei said that the US interpreted seriously distorted and rendered exaggerated Chinese measures, deliberately provoking unnecessary misunderstandings and panic.

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