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West Australian
2 days ago
- Automotive
- West Australian
The West is recycling rare earths to escape China's grip — but it's not enough
As China tightens its grip on the global supply of key minerals, the West is working to reduce its dependence on Chinese rare earths. This includes finding alternative sources of rare earth minerals, developing technologies to reduce reliance, and recovering existing stockpiles through recycling products that are reaching the end of their shelf life. 'You cannot build a modern car without rare earths,' said consulting firm AlixPartners, noting how Chinese companies have come to dominate the supply chain for the minerals. In September 2024, the US Department of Defense invested $US4.2 million ($6.5m) in Rare Earth Salts, a startup that aims to extract the oxides from domestic recycled products such as fluorescent light bulbs. Japan's Toyota has also been investing in technologies to reduce the use of rare earth elements. According to the US Geological Survey, China controlled 69 per cent of rare earth mine production in 2024, and nearly half of the world's reserves. Analysts from AlixPartners estimate that a typical single-motor battery electric vehicle includes around 550 grams (1.21 pounds) of components containing rare earths, unlike gasoline-powered cars, which only use 140 grams of rare earths, or about 5 ounces. More than half of the new passenger cars sold in China are battery-only and hybrid-powered cars, unlike the U.S., where they are still mostly gasoline-powered. 'With slowing EV uptake (in the U.S.) and mandates to convert from ICE to EV formats receding into the future, the imperative for replacing Chinese-sourced materials in EVs is declining,' said Christopher Ecclestone, principal and mining strategist at Hallgarten & Company. 'Pretty soon, the first generation of EVs will be up for recycling themselves, creating a pool of ex-China material that will be under the control of the West,' he said. Only 7.5 per cent of new US vehicle sales in the first quarter were electric, a modest increase from a year ago, according to Cox Automotive. It pointed out that around two-thirds of EVs sold in the U.S. last year were assembled locally, but manufacturers still rely on imports for the parts. 'The current, full-blown trade war with China, the world's leading supplier of EV battery materials, will distort the market even more.' Of the 1.7 kilograms (3.74 pounds) of components containing rare earths found in a typical single-motor battery electric car, 550 grams (1.2 pounds) are rare earths. About the same amount, 510 grams, is used in hybrid-powered vehicles using lithium-ion batteries. In early April, China announced export controls on seven rare earths. Those restrictions included terbium, 9 grams of which is typically used in a single-motor EV, AlixPartners data showed. None of the six other targeted rare earths are significantly used in cars, according to the data. But April's list is not the only one. A separate Chinese list of metal controls that took effect in December restricts exports of cerium, 50 grams of which AlixPartners said is used on average in a single-motor EV. The controls mean that Chinese companies handling the minerals must get government approval to sell them overseas. Caixin, a Chinese business news outlet, reported on May 15, just days after a US-China trade truce, that three leading Chinese rare earth magnet companies have received export licenses from the commerce ministry to ship to North America and Europe. What's concerning for international business is that there are barely any alternatives to China for obtaining the rare earths. Mines can take years to get operating approval, while processing plants also take time and expertise to establish. 'Today, China controls over 90 per cent of the global refined supply for the four magnet rare earth elements (Nd, Pr, Dy, Tb), which are used to make permanent magnets for EV motors,' the International Energy Agency said in a statement. That refers to neodymium, praseodymium, dysprosium and terbium. For the less commonly used nickel metal hydride batteries in hybrid cars, the amount of rare earths goes up to 4.45 kilograms, or nearly 10 pounds, according to AlixPartners. That's largely because that kind of battery uses 3.5 kilograms of lanthanum. 'I estimate that around 70 per cent of the over 200 kilograms of minerals in an EV goes through China, but it varies by vehicle and manufacturer. It's hard to put a definitive figure on it,' said Henry Sanderson, associate fellow at The Royal United Services Institute for Defence and Security. However, there are limits to recycling, which remains challenging, energy-intensive and time-consuming. And even if adoption of EVs in the U.S. slows, the minerals are used in far larger quantities in defence. For example, the F-35 fighter jet contains over 900 pounds of rare earths, according to the Center for Strategic and International Studies, based in Washington, DC. China's rare earths restrictions also go beyond the closely watched list released on April 4. In the last two years, China has increased its control over a broader category of metals known as critical minerals. In the summer of 2023, China said it would restrict exports of gallium and germanium, both used in chipmaking. About a year later, it announced restrictions on antimony, used to strengthen other metals and a significant component in bullets, nuclear weapons production and lead-acid batteries. The State Council, the country's top executive body, in October released an entire policy for strengthening controls of exports, including minerals, that might have dual-use properties, or be used for military and civilian purposes. One restriction that caught many in the industry by surprise was on tungsten, a US-designated critical mineral but not a rare earth. The extremely hard metal is used in weapons, cutting tools, semiconductors and car batteries. China produced about 80 per cent of the global tungsten supply in 2024, and the U.S. imports 27% of tungsten from China, data from the U.S. Geological Survey showed. About 2 kilograms of tungsten is typically used in each electric car battery, said Michael Dornhofer, founder of metals consulting firm Independent Supply Business Partner. He pointed out that this tungsten is not able to return to the recycling chain for at least seven years, and its low levels of use might not even make it reusable. '50 per cent of the world's tungsten is consumed by China, so they have business as usual,' Lewis Black, CEO of tungsten mining company Almonty, said in an interview last month. 'It's the other 40 per cent that's produced (in China) that comes into the West that doesn't exist.' He said when the company's forthcoming tungsten mine in South Korea reopens this year, it would mean there would be enough non-China supply of the metal to satisfy US, Europe and South Korean needs for defence. But for autos, medical and aerospace, 'we just don't have enough.'
CNBC
3 days ago
- Automotive
- CNBC
The West is recycling rare earths to escape China's grip — but it's not enough
BEIJING — As China tightens its grip on the global supply of key minerals, the West is working to reduce its dependence on Chinese rare earth. This includes finding alternative sources of rare earth minerals, developing technologies to reduce reliance, and recovering existing stockpiles through recycling products that are reaching the end of their shelf life. "You cannot build a modern car without rare earths," said consulting firm AlixPartners, noting how Chinese companies have come to dominate the supply chain for the minerals. In September 2024, the U.S. Department of Defense invested $4.2 million in Rare Earth Salts, a startup that aims to extract the oxides from domestic recycled products such as fluorescent light bulbs. Japan's Toyota has also been investing in technologies to reduce the use of rare earth elements. According to the U.S. Geological Survey, China controlled 69% of rare earth mine production in 2024, and nearly half of the world's reserves. Analysts from AlixPartners estimate that a typical single-motor battery electric vehicle includes around 550 grams (1.21 pounds) of components containing rare earths, unlike gasoline-powered cars, which only use 140 grams of rare earths, or about 5 ounces. More than half of the new passenger cars sold in China are battery-only and hybrid-powered cars, unlike the U.S., where they are still mostly gasoline-powered. "With slowing EV uptake (in the U.S.) and mandates to convert from ICE to EV formats receding into the future, the imperative for replacing Chinese-sourced materials in EVs is declining," said Christopher Ecclestone, principal and mining strategist at Hallgarten & Company. "Pretty soon, the first generation of EVs will be up for recycling themselves, creating a pool of ex-China material that will be under the control of the West," he said. Only 7.5% of new U.S. vehicle sales in the first quarter were electric, a modest increase from a year ago, according to Cox Automotive. It pointed out that around two-thirds of EVs sold in the U.S. last year were assembled locally, but manufacturers still rely on imports for the parts. "The current, full-blown trade war with China, the world's leading supplier of EV battery materials, will distort the market even more." Of the 1.7 kilograms (3.74 pounds) of components containing rare earths found in a typical single-motor battery electric car, 550 grams (1.2 pounds) are rare earths. About the same amount, 510 grams, is used in hybrid-powered vehicles using lithium-ion batteries. In early April, China announced export controls on seven rare earths. Those restrictions included terbium, 9 grams of which is typically used in a single-motor EV, AlixPartners data showed. None of the six other targeted rare earths are significantly used in cars, according to the data. But April's list is not the only one. A separate Chinese list of metal controls that took effect in December restricts exports of cerium, 50 grams of which AlixPartners said is used on average in a single-motor EV. The controls mean that Chinese companies handling the minerals must get government approval to sell them overseas. Caixin, a Chinese business news outlet, reported on May 15, just days after a U.S.-China trade truce, that three leading Chinese rare earth magnet companies have received export licenses from the commerce ministry to ship to North America and Europe. What's concerning for international business is that there are barely any alternatives to China for obtaining the rare earths. Mines can take years to get operating approval, while processing plants also take time and expertise to establish. "Today, China controls over 90% of the global refined supply for the four magnet rare earth elements (Nd, Pr, Dy, Tb), which are used to make permanent magnets for EV motors," the International Energy Agency said in a statement. That refers to neodymium, praseodymium, dysprosium and terbium. For the less commonly used nickel metal hydride batteries in hybrid cars, the amount of rare earths goes up to 4.45 kilograms, or nearly 10 pounds, according to AlixPartners. That's largely because that kind of battery uses 3.5 kilograms of lanthanum. "I estimate that around 70% of the over 200 kilograms of minerals in an EV goes through China, but it varies by vehicle and manufacturer. It's hard to put a definitive figure on it," said Henry Sanderson, associate fellow at The Royal United Services Institute for Defence and Security. However, there are limits to recycling, which remains challenging, energy-intensive and time-consuming. And even if adoption of EVs in the U.S. slows, the minerals are used in far larger quantities in defense. For example, the F-35 fighter jet contains over 900 pounds of rare earths, according to the Center for Strategic and International Studies, based in Washington, D.C. China's rare earths restrictions also go beyond the closely watched list released on April 4. In the last two years, China has increased its control over a broader category of metals known as critical minerals. In the summer of 2023, China said it would restrict exports of gallium and germanium, both used in chipmaking. About a year later, it announced restrictions on antimony, used to strengthen other metals and a significant component in bullets, nuclear weapons production and lead-acid batteries. The State Council, the country's top executive body, in October released an entire policy for strengthening controls of exports, including minerals, that might have dual-use properties, or be used for military and civilian purposes. One restriction that caught many in the industry by surprise was on tungsten, a U.S.-designated critical mineral but not a rare earth. The extremely hard metal is used in weapons, cutting tools, semiconductors and car batteries. China produced about 80% of the global tungsten supply in 2024, and the U.S. imports 27% of tungsten from China, data from the U.S. Geological Survey showed. About 2 kilograms of tungsten is typically used in each electric car battery, said Michael Dornhofer, founder of metals consulting firm Independent Supply Business Partner. He pointed out that this tungsten is not able to return to the recycling chain for at least seven years, and its low levels of use might not even make it reusable. "50% of the world's tungsten is consumed by China, so they have business as usual," Lewis Black, CEO of tungsten mining company Almonty, said in an interview last month. "It's the other 40% that's produced (in China) that comes into the West that doesn't exist." He said when the company's forthcoming tungsten mine in South Korea reopens this year, it would mean there would be enough non-China supply of the metal to satisfy U.S., Europe and South Korean needs for defense. But for autos, medical and aerospace, "we just don't have enough."
Arab News
17-05-2025
- Business
- Arab News
Saudi entertainment industry set to power economic diversification
RIYADH: Saudi Arabia's growing entertainment sector is set to become a key catalyst for growth across various industries and a central pillar in the Kingdom's broader economic diversification strategy, according to experts. Strengthening the industry is vital as Saudi Arabia continues to shift away from its long-standing dependence on oil revenues, aligning with its ambitious efforts to build a more resilient and diversified economy. The rapid growth of the Kingdom's entertainment sector is underscored by recent data and forecasts, including a report by AlixPartners which revealed that 33 percent of Saudi consumers plan to increase spending on out-of-home entertainment — significantly higher than the global average of 19 percent. Supporting this trend, data from the Ministry of Commerce showed that commercial registrations in the Kingdom's arts and entertainment sector rose by 20 percent in 2024 compared to 2023. Notably, innovative arts and entertainment activities saw a 30 percent increase, reaching 4,188 registered entities, while amusement park activities grew by 26 percent, totaling 6,108 registrations. In an interview with Arab News, Shahid Khan, partner and global head of Media, Entertainment, Sports, and Culture at consulting firm Arthur D. Little, highlighted the sector's potential to generate a ripple effect across hospitality, tourism, and retail, as well as real estate, and technology. 'Major events and attractions are drawing both international and domestic tourists — contributing directly to the Kingdom surpassing its original target of 100 million annual visitors by 2030, an achievement reached seven years ahead of schedule,' said Khan. Major events and attractions are drawing both international and domestic tourists. Shahid Khan, partner and global head of Media, Entertainment, Sports, and Culture at consulting firm Arthur D. Little He added: 'This surge in tourism fuels demand for hospitality infrastructure, including hotels, restaurants, and local transport, while extending average visitor stay and spend.' The Arthur D. Little official added that the growth in the entertainment sector could also propel the retail industry, with entertainment-led foot traffic expected to drive commercial activity in malls, high streets, and mixed-use developments. Guillaume Thibault, partner and head of Sports and Entertainment at Oliver Wyman for India, the Middle East, and Africa, echoed similar sentiments, noting that Saudi Arabia's entertainment industry will spur growth in adjacent sectors by driving demand for complementary services. He added that emerging entertainment destinations are helping cities like Riyadh and Jeddah position themselves as lifestyle hubs with the potential to compete on a global scale. 'Large-scale events and festivals drive hotel occupancy and airline bookings, while lifestyle venues anchor foot traffic in malls and high streets. Technology adoption accelerates through the demand for ticketing, crowd management, and immersive experiences,' said Thibault. He added: 'Entertainment is a key downstream activator for mega-events and is intricately intertwined with the urban fabric of these mega events, enhancing the hospitality, tourism, and retail sectors.' Looking ahead, the Ministry of Investment projects that the entertainment sector could generate 450,000 jobs and contribute 4.2 percent to Saudi Arabia's GDP by 2030. Impacts: retail spending, real estate and FDI Thibault emphasized that Saudi Arabia's youthful population — most of whom are under the age of 35 — will be a key driver of growth in the Kingdom's entertainment sector and could significantly boost retail spending. He noted that for young Saudis, entertainment is not viewed as a seasonal luxury, but rather as a regular and essential part of their spending habits. 'As more venues and formats become available, consumers are reallocating discretionary income from international travel to local entertainment. This 'localization of lifestyle' is increasing the frequency and variety of spending, from dining and merchandise to experiential add-ons,' said Thibault. Khan expressed similar views and added that rising disposable income among people in Saudi Arabia is empowering consumers with the means to pursue experience-rich lifestyles. 'This financial capacity is enabling a broader cultural shift — especially among younger Saudis — toward valuing experiences over possessions, and prioritizing social, live, and recreational activities as a core part of modern living,' he said. Khan added: 'What was once a limited and largely outbound market is now being redirected into the local economy — creating a dynamic, self-sustaining entertainment ecosystem at home.' Commenting on its impact on the real estate sector, Thibault stated that the entertainment industry is reshaping property demand by revitalizing underutilized land, promoting mixed-use development models, and enhancing the attractiveness and viability of secondary cities. Thibault further noted that developers are increasingly incorporating dedicated entertainment zones and hybrid residential complexes into their plans, viewing them as key drivers of footfall and community engagement. 'This enhances land value, accelerates absorption rates, and encourages long-term leasing. Moreover, large entertainment projects are contributing to the emergence of new urban centers that align with the Kingdom's regional development goals,' said Thibault. Khan pointed out that the entertainment sector has already reshaped the Kingdom's real estate landscape, both directly and indirectly. He said that the entertainment boom has contributed to a rise in property values across the Kingdom, especially in areas adjacent to major attractions. Khan further said that large-scale entertainment destinations — such as those under Qiddiya, Diriyah, AlUla, and others — are also catalyzing new hospitality and retail clusters, creating demand for hotels, serviced apartments, dining spaces, and lifestyle-driven real estate. 'In addition, the rise of cultural and live event venues across second-tier cities and emerging districts is stimulating regional real estate development, encouraging urban sprawl and infrastructure investment beyond the major metropolitan areas,' said Khan. In terms of the potential of attracting foreign direct investments, Thibault said that the Kingdom's entertainment sector presents a 'rare greenfield' opportunity in a G20 economy, supported by policy backing, untapped demand and significant scale. 'As regulatory clarity improves and exit mechanisms mature, we anticipate a rise in joint ventures, venture capital deployment in entertainment startups, and the entry of global operators, making entertainment a cornerstone of the Kingdom's FDI narrative,' said the Oliver Wyman official. Khan said that Saudi Arabia's sovereign wealth fund is playing a catalytic role — both directly and through its giga-projects and portfolio companies — by investing in and forming strategic partnerships with foreign players across the entertainment spectrum. He added that the efforts of PIF are facilitating market entry and localization of globally leading companies in key areas such as theme parks, live entertainment, attractions, and hospitality. Large-scale events and festivals drive hotel occupancy and airline bookings. Guillaume Thibault, partner and head of Sports and Entertainment at Oliver Wyman for India, the Middle East, and Africa In September, the PIF launched the National Interactive Entertainment Co. to create immersive storytelling experiences rooted in the Kingdom's heritage and Islamic history. The newly established firm, known as QSAS, will focus on developing, owning, and operating world-class interactive exhibitions throughout the Kingdom, the wealth fund said in a statement at that time. 'The entertainment sector is emerging as a key gateway for FDI in Saudi Arabia, underpinned by strong market fundamentals, government-backed infrastructure, and a robust regulatory push aligned with Vision 2030,' said Khan. In January, Saudi Arabia's General Entertainment Authority unveiled 29 investment opportunities targeting six key sectors of the industry. The targeted sectors include facilities, destinations, water parks, adventure parks, virtual reality parks, and e-gaming centers. Cinema and journey beyond Speaking to Arab News, Thibault noted that Saudi Arabia has rapidly emerged as one of the fastest-growing cinema markets in the world. He added that this momentum could pave the way for a new wave of industry growth by encouraging local content creation, supported through public-private co-investment models and enhanced by regulatory incentives for film production and post-production infrastructure. 'Elevating local narratives while attracting international studios can simultaneously boost soft power and develop a self-sustaining film economy,' said Thibault. Khan echoed similar views and said that Saudi Arabia currently has more than 600 screens and has witnessed a doubling of both ticket sales and box office revenues between 2019 and 2024. 'Expanding cinema access to underserved regions and enhancing operators' business models — by tapping into diversified revenue streams such as F&B, experiential offerings, and advertising — will be essential for long-term profitability and sector sustainability,' said Khan. He added: 'Additionally, forging international partnerships through co-productions, location incentives, and distribution alliances would further strengthen the overall industry while enabling knowledge transfer and job creation.' Thibault emphasized that Saudi Arabia should ambitiously expand its entertainment landscape beyond traditional formats such as cinema by investing in immersive, experience-driven offerings. These include esports arenas, mega-theme parks like those planned in Qiddiya, mixed-reality shows, adventure tourism, and platforms centered around heritage-based storytelling.
The Star
16-05-2025
- Automotive
- The Star
China's autos shine amid global slowdown
An AlixPartners report forecast that Chinese brands will account for 30% of the global market by 2030, compared with 21% last year. — China Daily BEIJING: China continues its good showing in the global automotive export market, with Russia remaining a stable source of demand for the nation amid the global tariff war affecting the industry, according to a report released by consulting firm AlixPartners. The report noted that China's auto exports soared 23% year-on-year to 6.4 million passenger vehicles in 2024, more than 50% above second-ranked Japan, though it expects growth to moderate to 4% in 2025 as tariffs ripple through the market. Russia and the Middle East remain key destinations for Chinese-origin goods and together accounted for 35% of exports last year, according to the report, surpassing the combined shipments to Europe and North America for the first time. It forecast that Chinese brands will account for 30% of the global market by 2030, compared with 21% last year. The report surveyed hundreds of automotive executives around the world. China's new energy vehicles saw robust production and sales in the first four months of the year. — China Daily/ANN
Yahoo
14-05-2025
- Business
- Yahoo
Consumers plan to curb footwear spending due to price hikes
This story was originally published on Fashion Dive. To receive daily news and insights, subscribe to our free daily Fashion Dive newsletter. Consumers worried over inflation and tariff-related price hikes may be stepping back from shoe purchases over the next six months, according to the Spring 2025 AlixPartners U.S. Footwear Consumer Survey. The survey of 1,006 U.S. footwear consumers found that work and dress shoes could see spending decline 29% and 26%, respectively, this spring and summer. Athleisure shoe spending is expected to drop 17%, and casual shoe spending is projected to decline 16%, per the report. With price being top of mind, some 78% of surveyed consumers said they have already walked away from a shoe purchase this year. That's 12 percentage points higher than in 2024. In addition, 59% of respondents said they wouldn't make a footwear purchase if the item was not on sale. The study, conducted online between Feb. 28 and March 10 with U.S. footwear consumers ages 15 and older, found that shoppers who view buying new shoes a luxury and not a necessity planned to ease up on their purchases of most footwear. This includes athletic styles, which are typically a growth category for the sector. 'Athletics are usually the most resilient segment, but even those purchases have slowed,' Andrew Hogenson, managing director at Alix Partners said in a statement. He added that analysts projected a 9-point decline, although 'price increases from aggressive trade policies could see [consumers] put the brakes on even harder.' In a press release accompanying the survey, AlixPartners said that imports accounted for around 99% of shoe sales, and carried an average tariff of around 12% before the latest round of levies. Tariffs could also force companies to raise prices and pass those increases on to consumers, per the survey. Matt Priest, CEO and president of FDRA said in the press release that the survey results confirm what the industry already knows, which is that consumer confidence is slipping and price sensitivity is peaking. 'With nearly 80% of consumers bracing for higher costs due to tariffs and nearly 8 in 10 walking away from a shoe purchase because of the price tag, footwear is shifting from a necessity to a discretionary expense for many families,' Priest said. Global trade policies are forcing many footwear and athleticwear brands to alter their sourcing strategies or ask for relief from government-led tariffs. Nike, Skechers, and Under Armour were among 80 footwear brands that recently signed a letter this month from the Footwear Distributors and Retailers of America to U.S. President Donald Trump urging his administration to offer exemptions for the industry, which already has high import fees. With the new tariffs, some brands could see duties ranging from 150% to nearly 220%, according to the letter. Recommended Reading Skechers to go private in $9.4B deal Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
