China’s Antimony Export Restrictions: The Impact on U.S. National Security
On August 14, China announced stringent export restrictions on antimony, citing national security concerns. This development has sent ripples through global markets, particularly affecting the United States, which relies heavily on Chinese imports of this critical mineral. Antimony is indispensable for the defense and electronics industries, finding its way into products such as armor-piercing ammunition, night vision goggles, and semiconductors. The restriction marks the latest in a series of export controls by China on essential minerals in 2023, including graphite, germanium, gallium, and rare earth processing technologies. As the top producer of antimony, responsible for nearly half of global production, China’s decision could have far-reaching implications for the U.S., which must now scramble to secure antimony supply chains from non-Chinese sources due to the high likelihood of supply disruptions.
Starting September 15, China will require licenses for the export of six antimony-related products and ban exports of gold-antimony smelting and separation technology without explicit permission. This policy aims to prevent any country from using Chinese exports to undermine China’s national sovereignty, security, and development interests. The U.S. Department of Interior has identified antimony as a critical mineral essential for defense technologies. The demand for antimony has surged due to ongoing conflicts in Ukraine and the Middle East, as well as increasing sales of U.S. military equipment to foreign governments. Given that the U.S. meets only 18% of its antimony demand through recycling, the dependency on Chinese imports raises significant concerns about potential vulnerabilities in the supply chain.
Domestic antimony mining in the U.S. saw a sharp decline due to stringent environmental regulations enacted in the 1970s, resulting in the country holding just 3% of global reserves. The Stibnite Gold Mine, once the largest producer of antimony in the U.S., ceased operations in the 1990s, ending the nation’s self-reliance for this critical mineral. In response to the new export restrictions, Perpetua Resources has proposed reopening the Stibnite Gold Mine to domestically produce antimony-trisulfide. However, due to permitting delays, production is not expected to commence until 2028. Interestingly, the announcement of China’s export restrictions caused Perpetua Resources’ share prices to rise by 19%, reflecting market optimism about the company’s future prospects.
China holds the majority of global antimony reserves, followed by Russia and Bolivia, with the U.S. lagging significantly behind. Most antimony mined in other countries is sent to China for processing and refining, further complicating the supply chain dynamics. To secure antimony supply chains, the U.S. must address both mining and refining capabilities, potentially through partnerships with countries like Tajikistan and Australia. Prices for antimony are expected to rise sharply due to China’s export restrictions, potentially reaching $30,000 per metric ton. In the short term, the U.S. may need to rely on multiple smaller producers to meet its demand.
The strategic importance of antimony cannot be overstated. Its applications in defense technologies make it a linchpin for national security. The U.S. government has made addressing the critical minerals issue a priority, but securing new mineral supply chains is a complex and expensive process, involving mining, refining, and manufacturing. Private companies entering the market face challenges such as volatile prices and geopolitical tensions. The lengthy permitting process is one of the biggest hurdles, with an 18-year timeframe from identifying the minerals to actual mining operations. Despite these challenges, the U.S. government has provided funding to companies like Perpetua Resources, which plans to begin construction in 2025 and be operational by 2028.
China’s recent export controls on antimony have validated the need for a secure domestic supply, according to industry experts. The move serves as a wake-up call for the U.S. government, emphasizing the urgency of reducing reliance on China for critical minerals. The COVID-19 pandemic has further highlighted the U.S.’s dependency on China for essential resources, making it imperative for the country to prioritize domestic production of critical minerals. This issue is not just about economic growth; it is fundamentally about national security. The restrictions could potentially disrupt the production of critical military equipment, raising concerns about the U.S.’s ability to maintain its defense capabilities.
China’s dominance in critical minerals has been a concern for many years. The country has used its control over these resources as leverage in geopolitical conflicts, much like how Russia has used its gas supply to influence Europe. The U.S. is facing similar challenges, with almost all its antimony mines being shut down and a shortage of talent in the industry. The recent export restrictions are part of an ongoing trade dispute between the U.S. and China, which has escalated into a full-blown geopolitical rivalry. The U.S. government is taking a stand against China’s unfair trade practices, but it will take time to build a secure domestic supply of critical minerals, leaving the country vulnerable in the interim.
Interestingly, Chinese exports of other critical minerals like gallium, germanium, and graphite have shown a pattern of spike, drop, and recovery, alleviating initial fears of a long-term supply shortage. According to customs figures, sales of these minerals spiked before export controls were imposed, followed by a sharp drop and subsequent recovery. This trend could serve as an example for the upcoming restrictions on antimony. Manufacturers may have anticipated the restrictions and stocked up beforehand, leading to a temporary spike in exports. However, the long-term impact remains uncertain, and the U.S. must prepare for potential disruptions in the supply chain.
The recent moves by China have caused concern in the critical minerals industry, with insiders worrying about how far Beijing will go in leveraging their supply chain dominance. Antimony is used in various industries, including weapons production and batteries, making it a vital resource. CEO Lewis Black from Almonty Industries believes this move to be confrontational, affecting many sectors. China has previously implemented export controls on graphite, another critical mineral, rattling the industry and prompting stakeholders to seek backup plans. While China has maintained an equilibrium in the supply of critical minerals, this latest move may disrupt that balance, causing further uncertainty in global markets.
China’s Commerce Ministry spokesperson has stated that these controls are a matter of national security. The U.S. has also implemented restrictions on China’s access to high-end semiconductors, escalating the geopolitical tension. Industry experts like Christopher Ecclestone, mining strategist at Hallgarten & Company, expect China to impose export controls on other critical minerals like tungsten in the near future. The U.S. has plans to reduce its reliance on Chinese tungsten by 2026, but this move by China may be in retaliation against perceived intrusions on their national interests. Companies in the U.S. and elsewhere are now looking to tap into the opportunity presented by the export controls, particularly in the rare earths industry.
As the U.S. grapples with the implications of China’s export restrictions, it becomes evident that a multi-faceted approach is required to secure critical mineral supply chains. This includes not only increasing domestic production but also forging international partnerships and investing in refining capabilities. The U.S. must also address the regulatory and environmental challenges that have historically hindered domestic mining operations. By adopting a comprehensive strategy, the U.S. can mitigate the risks associated with its dependency on China and ensure a stable supply of critical minerals for its defense and high-tech industries.
In conclusion, China’s export restrictions on antimony have highlighted the vulnerabilities in the U.S.’s critical mineral supply chains. The U.S. must act swiftly to diversify its sources and reduce its reliance on Chinese imports. This will involve significant investment in domestic mining and refining capabilities, as well as strategic partnerships with other countries. The road ahead is fraught with challenges, but the stakes are too high to ignore. Ensuring a stable supply of critical minerals is not just an economic imperative; it is a matter of national security.
As the global landscape for critical minerals continues to evolve, the U.S. must remain vigilant and proactive in securing its supply chains. The lessons learned from China’s recent export restrictions on antimony should serve as a catalyst for change, driving efforts to build a more resilient and self-reliant system. By addressing the current vulnerabilities and planning for future contingencies, the U.S. can safeguard its national security and maintain its technological edge in an increasingly competitive world.