Weekly News Review February 3 – February 9 2025

Welcome to our weekly news round-up.

This week once again showcased the deep ties between raw materials and geopolitics. China tightened export controls on critical minerals, while U.S. President Trump signaled interest in Ukraine’s rare earth deposits in exchange for further support.

EUROPE AND CHILE LAUNCH TRADE AGREEMENT:

The treaty promises closer bilateral relations and more cooperation on critical minerals.

The Interim Trade Agreement (ITA) between the European Union and Chile has officially come into force following the ratification process. Signed in December 2023, the ITA promises to strengthen bilateral relations and foster trade and investment opportunities. A central provision of the agreement is the elimination of tariffs on 99.9 percent of exports from the EU to Chile, giving European companies more access to the market in Latin America. In addition, Chile is set to benefit from increased financing from Europe.

The EU, on the other hand, hopes to gain better access to the mineral wealth of the Latin American country. Chile is especially rich in lithium and copper, two key elements for the global energy transition. In recent years, the country has been the leading supplier of lithium to the EU, accounting for over half of the total imports. In the future, Chile could also become a player in the rare earth industry, with mining company Aclara developing a project close to the central trade hub of Concepción.

INDIA: TARIFFS REMOVED TO BOOST DOMESTIC PRODUCTION –

The measure aims to boost domestic production and raw material supply. Last year, the country already removed tariffs on several critical minerals.

India plans to eliminate import tariffs on waste and scrap of twelve critical minerals to ensure the availability of these resources for domestic production. This measure is outlined in the budget proposal for this year and the next. As Finance Minister Nirmala Sitharaman explained on Saturday, antimony, cobalt, cadmium, rhenium, and copper are among the affected materials. Additionally, tariffs on the scrap and waste of lithium-ion batteries will be abolished.

The government also plans to exempt various capital goods used in manufacturing these batteries, which are essential for mobile phones and electric vehicles, from these duties. Furthermore, the government intends to implement measures to recover critical minerals from mining residues or by-products, as the minister added.

Last year, India removed tariffs on 25 critical minerals to boost economic growth and facilitate the transition to clean energy. Last week, the country announced nearly $2 billion in state investments to support projects from mining to the circular economy, aiming to strengthen its raw material autonomy. Nearly simultaneously, Prime Minister Narendra Modi urged the domestic industry to expand its value chains. For the emerging economy, it would be unacceptable to export raw materials and then import the products made from them, Modi said.

TRUMP SEEKS RARE EARTH DEAL WITH UKRAINE:

At a press conference in the Oval Office, the U.S. President floated raw materials access as a condition for further support.

U.S. President Donald Trump has indicated he wants Ukraine to grant the U.S. access to its rare earth resources as a condition for continued support in its war against Russia.

At a press conference on Monday, Trump asserted that the U.S. has provided Ukraine with more military and economic aid than its European allies and emphasized the need to rebalance this disparity. He pointed to Ukraine’s “valuable rare earth” resources as a key asset in potential negotiations, suggesting that the government of the East European country would be willing to make a deal with the U.S.

Ukrainian Resources Becoming Increasingly Relevant:

A source close to Zelenskyy told the Financial Times that Trump’s remarks “appear to align with the ‘victory plan’ presented to him in the fall.” The source added that Ukraine had offered Trump “special terms” for cooperation on critical resources, emphasizing the importance of safeguarding them from Russia and Iran.

Ukraine’s natural resources are increasingly central to discussions about the war with Russia. According to an analysis by the German Bundestag (PDF), Ukraine hosts numerous deposits of critical minerals, including titanium, lithium, and rare earths. The latter are located mainly on the so-called Ukrainian Shiel or Ukrainian Crystalline Massif, which stretches from the country’s southwest to the northwest. Some of these deposits risk becoming lost to Russia’s advancing forces.

Challenges Remain:

Even if the U.S. secures Ukraine’s rare earth materials, refining remains challenging, as China dominates the supply chain. For instance, the only active U.S. rare earth mine, Mountain Pass, still ships its output to China due to limited domestic refining capacity. Its operator, MP Materials, is constructing a processing facility in Texas.

CHINA EXPANDS LIST OF STRATEGIC METALS SUBJECT TO EXPORT CONTROLS:

China has expanded its list of raw materials subject to export controls, according to a statement from the Ministry of Commerce on Tuesday. The new regulations apply to certain compounds and products from indium, molybdenum, bismuth, tungsten, and tellurium. Among these are cadmium telluride wafers, which are used in certain types of solar cells.

Similar to the case of gallium and germanium, which have been subject to similar rules since the summer of 2023, the latest measures are being implemented with national security concerns in mind. The listed products can be used for civilian and military purposes (dual-use). According to the U.S. Geological Survey, China is the leading producer of these elements.

Number of Raw Materials Subject to Export Restrictions Growing:

Just over a year after restrictions on gallium and germanium were introduced, comparable measures were implemented for antimony. A few months later, China specifically targeted the United States, a response to U.S. efforts to cut off China’s access to advanced computer chips. Relations between the two nations further deteriorated under U.S. President Donald Trump, with recent announcements of tariffs on Chinese goods. The latest announcement of export controls can be interpreted as a direct response to these developments, especially given their timing.

INDIA AND SAUDI ARABIA FORM STRATEGIC METALS ALLIANCE:

The subcontinent aims to diversify its resource sources for its growing economy, while the Gulf state possesses untapped mainly mineral deposits.

India and Saudi Arabia are striving to become key players in the global resource sector, and now, the two countries are planning to enhance cooperation in this field. The collaboration was announced on Tuesday, with specific goals including investment and technology partnerships and strengthening supply chains. The announcement followed a meeting between India’s Minister of Coal and Mining, Shri G. Kishan Reddy, and Saudi Arabia’s Minister of Industry and Mineral Resources, Bandar Ibrahim Alkhorayef, in New Delhi.

According to India’s government, the plans align with the newly launched National Critical Minerals Mission, which aims to drive the exploration and processing of critical resources. By tapping into its mineral reserves and investing in foreign resource projects, India hopes to reduce its dependency on imports from China, especially for its burgeoning high-tech sector.

Additionally, these resources are expected to contribute to expanding renewable energy; the densely populated country has primarily relied on fossil fuels. Saudi Arabia’s largely untapped mineral deposits, valued at $2.5 trillion, could be crucial in this transition. As the world’s largest oil exporter, Saudi Arabia also aims to diversify its economy, expanding its resource sector to create a broader economic base.

Kabir Taneja, Deputy Director of India’s Observer Research Foundation, views critical minerals, alongside future technologies such as artificial intelligence, as the “proverbial new oil.” While national interests have traditionally dominated resource policy, he suggested in an interview with Arab News that countries like India and Saudi Arabia could collaborate to shape a multipolar future.

AFRICA’S FIRST STRATEGIC METALS REFINING FACILITY TO BEGIN DEVELOPMENT:

American Resources and its holding ReElement Technologies have partnered with South African-based Novare Holdings to establish Africa’s first integrated critical mineral refining facility with a $100 million investment. As the first of its kind, the facility and possible future additions will enhance Africa’s global supply chain by producing high-purity lithium carbonate, rare earth oxides, and other critical minerals locally instead of exporting raw materials abroad.  

Ben Kincaid, CEO of ReElement Technologies Africa, stated, “This partnership brings innovative refining technology to Africa, enabling nations to maximize the value of their resources.” Ola Leepile, CEO of Novare Group, added, “This aligns with our mission to drive local value addition and industrial development.”

ReElement will provide its advanced refining technology, while Novare will invest capital and manage operations. Development of the project is set to begin in late 2025. ReElement made headlines last October, highlighting that its plant in Indiana is the first in the world to produce lithium and rare earth in the same facility.  

Local Value Creation Instead of Exporting Raw Materials:

The initiative highlights the growing commitment among mineral-producing regions to enhance local value creation and economic benefits. Last week, for example, India’s Prime Minister Narendra Modi called it “unacceptable” for the country’s emerging economy to export raw materials only to import later finished products made from them. Namibia and Indonesia, two major raw material producers, have already implemented export bans on raw materials in the past to encourage a ramp of domestic refining capacities. 

Meanwhile, the first solely lithium-focused refinery is set to be finished in Ghana in 2026. A joint venture between CAA Mining Ltd, a UK-based company, Livista Energy, a Luxembourg-based company, and its Ghanaian subsidiary, Livista Ghana Ltd., was announced in 2023.