China imposes export controls on rare minerals used to make semiconductor chips

The Chinese government on Monday announced new limits on the exportation of two rare metals necessary for the production of semiconductors and electric vehicles.

Beginning Aug. 1., the Chinese Ministry of Commerce said exports of the metals germanium and gallium will be allowed only if exporters secure licenses from the ministry, a move it called essential to “protect national security and interests.”

Although the ministry did not go into detail about the reasons for the new restrictions, an editorial in the state-owned China Daily following the announcement blasted the Netherlands for its export controls on semiconductor components.

The editorial also noted that the U.S. is home to the largest germanium mines in the world but “seldom exploits them.” Russia, Belgium and Canada also produce germanium, while Russia, Ukraine, Japan and South Korea also produce gallium.

China leads the world in total production of both metals. The country produces about 650,000 kilograms of gallium per year, about 94 percent of global production. The nation has been dramatically increasing production since 2019, when environmental measures curtailed the use of similar metals.

The U.S., by contrast, has no current domestic source of the metal, according to the U.S. Geological Survey. China was also the largest germanium producer as of 2021, producing about 95 metric tons.

The announcement marks the latest in an ongoing back-and-forth between China and the U.S.

President Biden has pledged to ramp up the American transition to renewable energy, but the U.S. lacks domestic sources for many of the minerals necessary for the transition. In May, Beijing barred products made by American chip manufacturer Micron Technology from use in key infrastructure projects, claiming the U.S. company’s products presented a cybersecurity risk.

U.S. Treasury Secretary Janet Yellen is set to take her first trip as secretary to China this week, with Yellen reportedly seeking to assuage economic and trade tensions between Beijing and Washington.