China’s Ministry of Commerce proposed export restrictions on technology crucial for processing critical minerals such as lithium and gallium, according to a notice released by the ministry on January 2, inviting public feedback on these measures.
The The Chinese government has proposed adding various technologies such as those used for lithium refining and battery chemicals production to its list of items that are subject to export controls, according to a notice seeking public opinion from the Ministry of Commerce.
The restrictions, if implemented, would mark another step in Beijing’s ongoing efforts to regulate the export of critical mineral technologies, an area where it holds significant global dominance.
Asked about the proposal during a regular press conference on Friday, Mao Ning, a spokesperson for the Foreign Ministry, said: “What we can tell you as a principle is that China implements fair, reasonable and non-discriminatory export control measures.”
Bans on exports of key microchip elements to US
The plan was revealed just a month after China imposed a ban on the sale of key materials essential for semiconductor production — including gallium, germanium, antimony, and other “super hard” materials — to the US. This move followed Washington’s latest crackdown on China’s chip sector.
“In principle, the export of gallium, germanium, antimony, and superhard materials to the United States shall not be permitted,” China’s commerce ministry said. Gallium and germanium are used in semiconductors, while germanium is also used in infrared technology, fiber optic cables and solar cells.
“This shows the government is aware of the importance of keeping these advanced lithium technologies secret,” said Cofco Futures analyst Yu Yakun. “Overseas investments with such technologies will be under stricter scrutiny.”
The restrictions target processes critical for producing battery-grade lithium chemicals, including emerging methods like direct lithium extraction, where China has developed significant expertise.
Additionally, certain chemical compounds essential for battery cathodes, a key determinant of battery performance, are included in the proposed measures.
The notice also outlined restrictions on technologies used to extract gallium, another critical mineral. The scope of these restrictions could have implications for various industrial sectors dependent on gallium-based technologies.
Implications of the restrictions
The proposed measures could limit the overseas expansion of leading Chinese battery companies like CATL, Gotion, and EVE Energy. These firms rely on cutting-edge technology, which might now fall under stricter export controls, potentially slowing their global growth ambitions.
Adam Webb, head of battery raw materials at Benchmark Mineral Intelligence, stated that the restrictions aim to protect China’s dominance in lithium processing.
“These proposed measures would be a move to maintain this high market share and to secure lithium chemical production for China’s domestic battery supply chains,” Webb said.
He warned that Western lithium producers relying on Chinese technology could face significant challenges, depending on the severity of the restrictions.
The public has until February 1 to comment on the proposed changes. The announcement did not specify when the restrictions might take effect, leaving room for further developments as the consultation process unfolds.
China’s dominance in critical minerals
China’s recent export restrictions on critical minerals include gallium, germanium, cobalt, lithium, and manganese which are essential for electric vehicle (EV) batteries. These minerals are largely processed in China, creating a dependency that risks slowing EV manufacturing and delaying efforts to reduce greenhouse gas emissions. The U.S. has limited domestic reserves, and China’s control over both extraction and processing further highlights the need for alternative supply sources.
China dominates the global supply of critical materials like gallium, used in radio frequency chips for mobile phones and satellites, and lithium, essential for batteries in devices ranging from smartphones to EVs.
As global demand for EVs grows, the U.S. faces increasing challenges in securing a steady supply of these five critical minerals: lithium, cobalt, manganese, nickel, and graphite. China’s proposal would help it retain its “70% grip” on the global processing of lithium, according to Adam Webb.
A ban or restriction could significantly strengthen China’s dominance in the battery ecosystem, especially to boost its supply chain for EV batteries, according to experts. China’s EV sector is booming, surpassing 10 million EVs produced in November 2024. Nearly half of all cars sold in China last year were EVs, driven by a fierce price war and government subsidies.