China Eyes Battery Tech Export Curbs Before Trump’s Inauguration

According to an Associated Press report, China's Ministry of Commerce has proposed new export restrictions on technologies that produce battery components and process critical minerals like lithium and gallium. The proposed measures, outlined in a recently issued document, are part of a broader strategy to maintain China’s dominance in these sectors.

If implemented, they would follow a series of similar restrictions targeting critical minerals and related technologies. The proposal by China comes just before Donald Trump’s second-term inauguration, during which he is expected to impose tariffs and trade restrictions, particularly targeting China.

Impact on supply chains

Export curbs would create shortages of raw materials for electric vehicles (EVs), renewable energy storage, and electronics. The resulting price increases could make EVs and green technologies less affordable, slowing adoption rates. Sectors like aerospace and defense, which also rely on critical minerals, would face cost challenges.

These curbs could have far-extensive consequences for global supply chains. Adam Webb, head of battery raw materials at Benchmark Mineral Intelligence, told AP, “Depending on the level of export restrictions imposed, this could pose challenges for Western lithium producers hoping to use Chinese technology to produce lithium chemicals. 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.”

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Push for diversification

Due to China’s latest actions, companies and nations are accelerating efforts to build resilient, diversified supply chains. UK-based Integrals Power is a prime example, with its pilot plant capable of producing 20 tons of LFP (lithium iron phosphate) cathode material annually. The company sources high-purity raw materials from Europe and North America and is developing advanced LMFP (lithium manganese iron phosphate) chemistries.

LFP cathode material. Courtesy of Integrals Power.

“The effects of the Ministry of Commerce’s proposed ban could be highly disruptive and long-lasting,”  stated Behnam Hormozi, Founder and CEO of Integrals Power. “The bans come at a time when many industries are trying to accelerate the transition way from fossil fuels. Our strategy of developing manufacturing processes in-house, proving their effectiveness in our own pilot line, and making LFP and breakthrough LMFP cathode materials from raw materials sourced from Europe and North America means that we can help customers to meet the growing demand for clean energy technologies and reduce their reliance on China.”

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As LFP and LMFP chemistries gain traction for their safety, affordability, and performance, efforts like these underscore the importance of diversification in supporting decarbonization and innovation across industries. While China’s export curbs could disrupt markets in the short term, they may also drive innovation and diversification in the long run. However, the transition period will likely see price volatility and geopolitical frictions, posing challenges for industries reliant on critical minerals.