Weekly News Review October 14 – October 20 2024

Welcome to our weekly news review.

CHINA: EXPORT OF RARE EARTHS DECLINES IN SEPTEMBER –

On Monday, the Chinese customs authority released figures regarding the export of rare earths in September. According to the data, exports of this group of raw materials decreased by more than eleven percent compared to August, falling to 4,181 tons. However, compared to the same month last year, there was a six percent increase.

New regulations for exporting rare earths have been in effect in the People’s Republic since the beginning of the month. Unlike the case with gallium and germanium, where exports surged shortly after the announcement of restrictions, a similar trend has not yet emerged for rare earth elements. Meanwhile, according to Bloomberg, China’s foreign trade has fallen short of analysts’ expectations, affecting both imports and exports.

AUSTRALIA: ASM TO ADVANCE RARE EARTH PROJECT –

The Australian government awarded the Dubbo project in New South Wales $3.7 million.

Critical minerals miner Australian Strategic Minerals has secured $3.7 million (AUS$5 million) in government support to advance its Dubbo rare earth project in New South Wales. The funding will support up to half the expenses of a study to find more efficient rare earth refining methods at ASM’s mine and processing plant. Besides the coveted rare earths, the deposit contains other critical minerals, such as zirconium, hafnium, and niobium. ASM managing director and CEO Rowena Smith thanked the government for the support, adding that the funding will fast-track the development of the Dubbo project, setting it up to supply industries in Australia and partner countries.

In a press statement, Australian resource minister Madeleine King emphasized that the Australian government is committed to supporting the domestic rare earth and critical minerals sector to help Australia and its partners “meet their economic, national security and emission reduction commitments.” King added that the project would receive further support through Premier Anthony Albanese’s plan to provide tax incentives for domestic critical minerals processing under the Future Made in Australia Act. In September, King called it a “national mission” to boost Australia’s critical mineral sector. However, the opposition has so far disputed the proposed tax breaks.

ASM is currently in talks with the Export-Import Bank of the United States about a possible $600 million in debt financing. The support would be linked to U.S. companies supplying construction goods and equipment during the construction phase and the project’s role in cross-continental supply chains.

GERMANIUM: FIRST SHIPMENT FRPM CONGO TO EUROPE –

China, the world’s largest germanium producer, imposed export restrictions in August 2023.

Reuters reports that Gecamines, the Democratic Republic of Congo’s state-owned mining company, has announced the first shipment of germanium concentrate to Europe. The concentrate is produced by Gecamines subsidiary STL in the southern town of Lubumbashi and shipped to Belgian materials technology company Umicore for further processing.

STL recovers germanium and other critical minerals, such as cobalt, copper, and silver, from Big Hill, a tailing dump hosting an estimated 14 million tons of metal-containing slags accumulated from a century of mining activity in the DRC’s south. The agreement between Umicore and STL was signed in May with plans to make the inaugural shipment in the fourth quarter. While the mining company aims to benefit from Umicore’s expertise, the Belgian company seeks to diversify its germanium supply sources. Umicore uses germanium to create materials for optical and electronic applications, including fiber optics, solar cells, and electronics.

In July, Gecamines said it aims to reach an annual germanium output at Big Hill of 30 tons. Although more recent data is difficult to obtain, the United States Geological Survey estimated global production in 2021 to be 140 tons (PDF), making STL’s target output substantial.

In August 2023, China, the world’s largest producer of the technology metal, imposed export restrictions on germanium and gallium. In the aftermath, shipments abroad came to a standstill and have since developed differently. Gallium exports have stabilized, while germanium shipments remain below figures before the restrictions.

Western nations have ramped up efforts in recent years to diversify supply chains and forge partnerships with other resource-rich countries to address possible future disruptions. The United States, the then-head of the Minerals Security Partnership, praised the agreement between STL and Umicore following the signing, highlighting that the deal would increase the global supply of germanium. The MSP is a multilateral association comprising 14 nations and the European Union that seeks to connect industry nations with resource-rich countries.

DIGITAL PRODUCT PASSPORT: AUSTRALIA AND CHINA WORKING ON IMPLEMENTATION –

Conflicting legal requirements across nations hinder implementation. A passport could offer a tool to evaluate products regarding their origin.

A team of researchers from the University of Sydney Law School and Fudan University in China is working on implementing a digital passport to increase the traceability of critical minerals in global supply chains. According to a media statement, a digital product passport (DPP) could be a vital tool for authorities, businesses, and consumers to evaluate products regarding their origin.

A cross-border implementation would facilitate a circular economy and environmentally conscious production of raw materials. The researchers clarify that a DPP contains various information metrics along the whole value chain, from mining to refining and consumption and recycling. The central topic of research is the actual implementation of such a passport, as Associate Professor Jeanne Huang from Sydney Law School clarifies:

“Our research aims to resolve the conflict of laws that complicates the implementation of DPPs across borders.” Conflicting legal requirements across different nations present the main challenge of adopting a standardized DPP.

In the recently appointed Panel on Critical Energy Transition Minerals, the United Nations also advocated for more traceability and transparency regarding critical mineral supply chains to ensure the global energy transition is pursued with “equity, justice, and sustainability.” The panel recommended establishing an expert advisory group and a system to trace critical minerals to tackle challenges regarding extractive industries in developing nations.

Under the recently enacted Critical Raw Materials Act, the European Union also addresses the lack of information regarding critical minerals and recyclability. While not for every raw material, the law will require products with permanent magnets to include information on the recyclability and recycled content of the rare earth elements contained. With the data, recycling companies can recover and revalorize the contents more efficiently, boosting the circularity of the critical minerals.

INTERNATIONAL ENERGY AGENCY: POLITICAL LANDSCAPES AND CLIMATE CHANGE THREATEN ENERGY SECURITY –

Agency Calls for More Investments and Policy Support. High Concentration of Raw Material Supply Chains Remains a Risk.

A new report from the International Energy Agency (IEA) foresees significant challenges for global energy supply in the coming years. According to the report, geopolitical and regional conflicts pose considerable risks to energy security and the targeted reduction of greenhouse gas emissions.

Additionally, climate change itself, through extreme weather events, presents a growing threat to energy supply. At the same time, electricity demand is expected to rise sharply, partly due to heatwaves that increase the need for cooling systems and the expansion of Artificial Intelligence, which requires vast, energy-hungry data centers.

In this context, the agency calls for more robust political measures and investment, especially in power grids and energy storage, to enhance energy security and climate protection. Even though clean energy sources increasingly support the global energy system and the demand for fossil fuels is expected to decline after 2030, this momentum needs further accelerated.

Supply Chains: High Regional Concentration at Least Until 2025 –

A key issue is the heavy concentration of supply chains for clean energy in just a few countries, especially China. China leads in the mining and processing of many of the critical minerals needed and in production capacities for technologies such as batteries, photovoltaics, and wind power.

The IEA sees measures like the U.S. Inflation Reduction Act and the EU Net Zero Industry Act essential to strengthening domestic supply chains. Despite many announced projects, the supply of certain raw materials, such as copper and lithium, is expected to grow more slowly than demand. One reason for this is the very long lead times in mining.

Additionally, the currently low prices for critical minerals dampen the “investment appetite,” threatening future supply diversification.

According to the agency, the regional distribution is unlikely to change significantly in the next ten years; by 2035, up to 75 percent of supply growth for refined copper, lithium, and cobalt will still come from today’s largest producers. The figure for battery-grade graphite and nickel is even 90 percent, and market concentration remains very high for rare earth elements as well.

AUSTRALIA: NEW SOUTH WALES ADMINISTRATION PLEDGES MILLIONS TO STRATEGIC METALS PROJECTS –

The Australian state aims to position itself among the leading mining regions.

The government of New South Wales has launched a royalty deferral initiative for critical minerals projects worth $168 million (AUS$250 million). The plan, which the NSW government said in a press statement, is aimed at assisting new mining projects in the early stages of development by easing financial pressures. Exploration works in underexplored areas are highly cash-demanding and involve major uncertainty regarding their potential outcome.

In addition to financial support, the initiative also examines the implementation of a rapid assessment framework, which would give companies more information regarding potential projects and facilitate exploration efforts. With the new strategy, NSW seeks to position itself among the leading mining states of Australia. The NSM government hopes to attract more investment into the state’s mining industry through the initiative.

“We’ve got the metals and minerals the world needs, and NSW is open for business,” NSW Premier Chris Minns said.

According to the government, NSW hosts 21 of the 31 minerals the Australian government classifies as critical. However, it clarified that the new initiative will focus mainly on rare earth elements, such as copper, cobalt, and silver, adding that there are currently twelve investment-ready critical minerals mining and processing projects in the state.