Taiwan wants to reduce reliance on mainland China for rare earth minerals. It won’t be easy
>building block for consumer electronics – because the world’s second largest economy has an outsize share of global reserves and advanced mining, experts say.
>The Taiwanese government has for the past six years urged businesses to reshore production from the mainland or consider alternative bases like Southeast Asia.
>It also wants companies to reduce reliance on Chinese rare earth minerals, said Lo Chih-cheng, a legislator from Taiwan’s ruling Democratic Progressive Party.
>Researchers on the island, where electronics manufacturing is a bedrock of the US$765 billion economy, are looking into ways to find alternative sources, according to Taiwanese media.
>They’ve been trying to diversify, both the government and private sector, but that doesn’t necessarily mean they’ve been successful,” Lo said.
Taiwan’s deep-seated economic ties with mainland China have been thrust into the spotlight in recent days after Beijing held military exercises encircling the island in response to a visit to Taipei by US House Speaker Nancy Pelosi.
>Though Taiwanese firms have reason to quit the mainland, cutting imports of rare earths will be an uphill battle because Beijing command’s the world’s largest reserves and has established an advanced processing system, analysts said.
>“It is going to be very difficult for Taiwan to reduce its rare earth import dependency on China,” said Amitendu Palit, senior research fellow at the Institute of South Asian Studies with National University of Singapore. “China’s near monopoly in global rare earths production ensures that Taiwan’s manufacturing sector continues to depend on China as the biggest source.”
>Only China has the rare earth minerals neodymium, praseodymium, terbium and dysprosium that are used to make miniaturised permanent magnets for electronics, said Jack Lifton, executive chairman of the Critical Minerals Institute in Toronto.
>Taiwanese producers of PCs and phones need those magnets for their products, he said.
>Up until recently, other countries have avoided mining rare earths on fear of polluting waterways, generating radioactivity and damaging the land, experts said.
>Taiwan has crucial minerals but does not want the pollution that mines would cause, said Darson Chiu, a research fellow with the Taiwan Institute of Economic Research under the Department of International Affairs.
While Taiwan looks for new sources of rare earths, mining the minerals in China is becoming more accessible.
>Yang Wang, a senior research analyst at Counterpoint Research, said China’s industry had an economy of scale, high volume production and “an ecosystem of players up and down the value chain”, with 85 per cent of rare earth minerals concentrated in one part of Inner Mongolia and the rest in Guangdong, Hunan and Jiangxi and Guangxi.
>“All the different types of rare earths are available at these sites and the reserves are of top quality,” Wang said. “A legacy of lax environmental standards [is] helping the industry to grow.”
>China has introduced “more complete” regulations on mining and environmental protection since last year, said Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University.
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