Global supply chains cannot avoid China’s crackdown on rare earths

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Batteries, solar panels and nuclear weapons all have one material in common: antimony. As Beijing tightens its grip on rare earth materials — seen as retaliation for growing trade restrictions and tariffs on Chinese-made goods — global supply chains will not be able to avoid the consequences.

Rare metal prices have risen in recent months as China began increasing restrictions on exports of critical materials. But few have grown like antimony. Last month, authorities announced the implementation of export licenses for antimony, with the new measures coming into effect on September 15.

The flame and heat resistant properties of antimony make it crucial in the production of batteries, especially lead-acid storage batteries and those used in cars. It is also used to make other auto parts, including brake pads.

In recent years, the global shift to green energy has created new demand for antimony. The material is able to improve the transparency of the solar cell cover glass. This super clear glass helps the performance of solar cells and is also used in smartphone screens.

More importantly, a long-term antimony shortage could pose a security risk. It is an essential material in the defense supply chain and is used in everything from the production of nuclear weapons to the manufacture of night goggles, ammunition and infrared sensors.

Export restrictions have yet to come into force. But antimony prices have already hit record highs. Spot prices in Europe and China have topped $25,000 a tonne, more than double prices at the end of last year.

For global users of this element, finding a replacement supplier does not seem easy. Demand is high and China is the largest producer of antimony globally, with nearly half of the global market share, according to the US Geological Survey.

The US, on the other hand, has not mined any marketable antimony since 1997. Production from countries such as Russia and Myanmar would introduce complications into supply chains due to sanctions. Even these deposits are often partially mined by Chinese-owned companies, which have a dominant position in processing and refining the material once mined.

Shares in Hunan Gold Corporation, one of the largest antimony producers, have gained 35% this year. Shares in Perpetua Resources, whose Idaho gold and antimony mine is one of the rare US sources of antimony deposits, have halved in the past month, with shares nearly tripling in the past six months.

Until the world’s supply chains find an alternative to Chinese-controlled sources of antimony, prices should continue to rise.

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