Hong Kong
CNN
—
China has unveiled plans to restrict exports of graphite — a mineral crucial to the manufacture of batteries for electric vehicles (EVs) — on national security grounds, the Ministry of Commerce and the General Administration of Customs said Friday.
The announcement comes just days after the United States imposed additional limits on the kinds of semiconductors that American companies are able to sell to Chinese firms.
China, which dominates the world’s production and processing of graphite, says export permits will be needed, starting in December, for synthetic graphite material — including high-purity, high-strength and high-density versions — as well as for natural flake graphite.
“At the moment both China and Western countries are engaged in a tit for tat, highlighting how protectionist measures often spread. Newton’s third law that every action causes a reaction applies here, too,” said Stefan Legge, head of tax and trade policy research at the University of St Gallen in Switzerland.
“At the same time, both sides of the dispute also realize how costly it is if geopolitics trumps economics,” he added.
The Institute for Energy Research, a Washington, DC-based research organization, says carmakers are trying to lock in supplies of graphite from sources outside of China, as demand for EV batteries outpaces other uses for the material.
Global sales of EVs, including purely battery-powered vehicles and hybrids, are soaring, according to the International Energy Agency.
Sales exceeded 10 million units last year, up 55% from 2021, and are expected to rise to nearly 14 million vehicles this year, it projected.
According to the US Geological Survey, the market for graphite used in batteries has grown 250% globally since 2018. China was the world’s leading graphite producer last year, accounting for an estimated 65% of global production, it said.
