Brics to take up rare earth export curb issue at leaders summit in July

China controls around 70 per cent of global rare earth elements (REE) mining output and accounts for about 90 per cent of the world's processing and refining of rare earth elements

The July summit of Brics, which has China as a member, will take up the country’s restrictions on exporting rare-earth magnets, according to a top official.

 

Export curbs on rare-earth magnets by China, imposed on April 4, have halted supplies across the globe.

 

Apart from China, the grouping comprises Brazil, Russia, India, South Africa, Egypt, Ethiopia, Iran, Saudi Arabia, the United Arab Emirates, and Indonesia.

 

China controls around 70 per cent of the mining output of global rare-earth elements (REE) and accounts for about 90 per cent of the world’s processing and refining of such products.

 

REEs are crucial in areas such as electric vehicles, wind turbines, and defence systems.  

 

“This is not a Brics problem; it’s a world problem, and we are going to discuss it,” Brazil Ambassador to India Kenneth Félix Haczynski da Nóbrega told Business Standard, adding that the issue was on the agenda but “we don’t know yet how China is going to react or whether there will be any relaxation”.

 

“You have to be mindful that Brics countries together contribute a huge chunk to the world’s REEs. This has to be discussed because this is a result of trade tensions not created by Brics countries. When Brics discusses this, it is discussing the consequences of trade wars,” Nóbrega added.

 

When asked about how the negotiations would be, the Brazilian ambassador said that the grouping had a traditional approach: A candid conversation and always mindful of coming up with a consensus. The idea is that “we are historically, socially, culturally, and economically diverse countries, but we have common interests”.  

 

“I don’t think we reached the point of negotiating in these terms; we are discussing these issues. Negotiations have yet to be launched. Before negotiating, you have to put the elements on the table and see what is going to be on your plate to discuss,” Nóbrega said.

 

As many as over 30 request approvals to import the critical metals by Indian companies are pending with the Chinese authorities. In the case of the United States, despite a trade truce, China is reportedly dragging out approval of Western companies’ requests.

 

At the summit, in Rio de Janeiro and on July 6 and 7, the grouping will pursue trading in local currencies and developing payment platforms, taking a cue from the Kazan declaration, he said.

 

It is about trade promotion. The Brics forum is less a government-to-government discussion and more business-to-business discussion, finding ways to do more business together. Trading in local currencies and developing payment platforms are some of the recommendations of the Russian presidency -- the Kazan Declaration. “It is not because we want to de-dollarise the world but to reduce the so-called transaction costs to do lots of things”, he added.

 

As far as the climate agenda is concerned, the Brics summit will be utilised to reach COP30 (Conference of Parties 30), which will be hosted by Brazil in Belem towards the end of this year, with a more mature discussion. 

 

The Brics working group on climate in April proposed new climate geopolitics focused on financing and social justice. 

 

One of Brics’ priorities is climate change – climate financing and national climate plans.

 

Brazil led the G20 last year, and the Brazil G20 task force has been discussing climate finance and climate. Now it’s having discussion within a smaller group, which is Brics.

 

“When discussions mature, you talk to different people. Then the idea is to reach COP30 with a more mature discussion. Brazil is pulling a thread from G20 to COP30,” Nóbrega said. 

Clicking together 

• Brazil, the current rotating chair of Brics, will host its 17 th summit in Rio de Janeiro on July 6-7
• Will discuss new climate geopolitics focused on financing, social justice
• Trading in local currencies and development of payment platforms, also on the agenda
• China’s rare earth supply curbs to be discussed as a global challenge