【By Guan察者网, Ruan Jiaqi】

During the recent G7 Canada Summit, the President of the European Commission, von der Leyen, falsely accused China of "weaponizing rare earths" and called on "like-minded partners" to unite and respond.

At that time, she solemnly presented a rare earth magnet, saying, "This magnet was manufactured by a Canadian company in Estonia, using raw materials from Australia... and will finally be used in electric vehicles and wind turbines in Germany and France."

However, the country most likely to achieve EU's "rare earth independence," France, said: "This huge fortune is too much for us to handle..."

On June 30 local time, the UK media Financial Times reported that although France has nine strategic projects among 47 under the EU's Critical Raw Materials Act (CRMA), including two related to rare earths, which ranks first among countries, its progress in rare earths still lags far behind China.

According to the report, as European industrial groups have recently turned their attention to France, several rare earth-related companies have stated that the demand for permanent magnets used in fighter jets, wind turbines, and electric vehicles has surged, leaving them overwhelmed.

"It's very frustrating because the demand is strong, but we don't have enough capacity to meet it," said Erick Petit, CEO of MagREEsource, a recycled magnet producer based in Grenoble, France.

MagREEsource has close cooperation with France's largest government research institution, the French National Center for Scientific Research (CNRS), and is currently responsible for a project supported by the EU's CRMA.

Petit said that MagREEsource hopes to produce 1,000 tons of magnets by 2027. But compared to the 16,000 tons of magnets imported annually from China, this output remains insignificant.

Even after raising 200 million euros from investors and public funds, Petit still called for more policy support. He claimed that the French domestic rare earth industry still needs more policy and financial support, as well as buyers willing to pay a premium for locally produced permanent magnets.

"We are satisfied with the existing support... but unfortunately, it's not enough compared to what is provided by the US or China," he said.

Meanwhile, market chaos has begun to emerge. Some corporate executives have complained that several niche trading companies involved in rare earth transactions have become increasingly "greedy," taking advantage of the situation to inflate prices, quoting prices "ten times higher than normal."

MagREEsource official website

According to the Financial Times, France has become the core of Europe's rare earth industry, thanks to its historical role as an important rare earth processing country. In addition, France has abundant and relatively low-cost nuclear energy, plus President Macron's push for re-industrialization, which has attracted many investors.

The report cited a French government official who said that France is planning to review the EU's Critical Raw Materials Act (CRMA) and introduce strategic reserve requirements, a proposal supported by companies such as Belgian chemical company Solvay.

Solvay has had a factory in the coastal city of La Rochelle in western France since 1948. During its peak in the 1980s and 1990s, the factory produced 15,000 tons of rare earth oxides per year. In April this year, the company announced that it would restart the production of heavy and light rare earth oxides for advanced magnet technology using ores from non-Chinese sources.

Additionally, the Lyon startup Carester, established in 2019, plans to produce heavy rare earth oxides using materials from non-Chinese sources starting in 2026. In March this year, the company's subsidiary Caremag received 216 million euros in funding from Japanese investors and the French government to build a recycling refining plant in Lac, southern France, according to the EU's Critical Raw Materials Act. The project has already allocated 70% of its expected production over the next decade to customers, including car manufacturer Stellantis.

In the same region, British company Less Common Metals (LCM) also plans to invest 110 million euros to build a factory to convert rare earth oxides into rare earth metals and alloys for manufacturing permanent magnets. The report states that LCM is one of the few companies outside China capable of producing rare earth metals and alloys, but the construction of this factory depends on whether it can secure funding and long-term buyers.

Eduardo Righetti of the Belgian think tank "European Policy Center" pointed out that although France is taking "the necessary actions at the moment," Europe is still "very far from establishing a complete and mature value chain."

In April, after US President Trump imposed exorbitant tariffs on China, China quickly retaliated, including implementing export controls on a series of key minerals and rare earth magnets. According to data cited by the Wall Street Journal, the supply of magnets to Western companies dropped sharply after April, causing a shock to global automotive, defense, and electronics manufacturers. In May, exports of rare earth magnets to the US fell by 93%.

Previously, industry insiders revealed that China is establishing an export licensing system. As the impact of the restrictions becomes evident, Western companies have begun to hype up the so-called "weaponization of rare earths" in an attempt to launch a public relations campaign against China. The Chinese Foreign Ministry has previously clearly stated that China's export control measures comply with international practices and are non-discriminatory, not targeting specific countries.

At the beginning of June, the European Automotive Suppliers Association (CLEPA) expressed concerns that only about a quarter of the hundreds of license applications submitted to China since April were approved, and several European parts factories and production lines had been forced to shut down. If no solution is found, more production lines are expected to shut down within three to four weeks.

On June 26, the Chinese Ministry of Commerce announced that it had legally approved a certain number of compliance applications for EU rare earth exports and would continue to strengthen the approval process for compliance applications.

Reuters reported on the 27th that Nils Poel, head of market affairs at CLEPA, confirmed that European suppliers had obtained sufficient licenses to avoid a large-scale production disruption predicted earlier this month.

Poel also told Reuters that the speed of Chinese license issuance was "accelerating," rising from 25% to 60%, and there are still hundreds of pending applications.

Even so, some Western companies are still "greedy," complaining about a so-called "rare earth shortage," continuing to hype up the idea of "weaponizing rare earths," and attacking China's rare earth export licensing system. They complain that they receive magnets barely sufficient for their needs, some applications are rejected, and future supply conditions are unpredictable.

On June 26, He Yadong, spokesperson for the Ministry of Commerce, stated that China has always attached great importance to maintaining the stability and security of the global supply chain. It continues to accelerate the review of export license applications for rare earths in accordance with laws and regulations, has legally approved a certain number of compliant applications, and will continue to strengthen the approval work for compliant applications. China is willing to further strengthen communication and dialogue with relevant countries on export controls and actively promote convenient and compliant trade.

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Original: https://www.toutiao.com/article/7521921298629444132/

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