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China’s antimony export controls rattle the tungsten industry

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Pictured are are crystals of the antimony ore stibnite (antimony sulphide). 

Universalimagesgroup | Universal Images Group | Getty Images

BEIJING — China’s latest export controls has rattled insiders of the critical minerals industry, and some are concerned that Beijing will leverage its global supply chain dominance in unprecedented ways.

China’s Ministry of Commerce announced Thursday that export controls on antimony would take effect Sept. 15. Antimony is used in bullets, nuclear weapons production and lead-acid batteries. It can also strengthen other metals.

“Three months ago, there’s no way [any] one would have thought they would have done this. It’s quite confrontational in that regard,” Lewis Black, CEO of Canada-based Almonty Industries, said in a phone interview. The company has said it’s spending at least $125 million to reopen a tungsten mine in South Korea later this year.

Tungsten is nearly as hard as a diamond, and used in weapons, semiconductors and industrial cutting machines. Both tungsten and antimony are on the U.S. critical minerals list, and less than 10 elements away from each other on the periodic table.

“My sector is now thinking this is getting much closer to home than graphite,” Black said, referring to China’s previous export controls. Last year, Beijing, the world’s largest graphite producer, said it would enforce export permits for the crucial battery material amid scrutiny from foreign countries worried about its dominance.

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“I can’t explain this move and I think that’s what rattled a lot of people in this sector, my customers, and they don’t have a plan B, which China is very aware of. There hasn’t been one for 30 years,” he said.

“There’s always been an equilibrium … they were never weaponized because they could create this snowball of escalation,” he said.

China accounted for 48% of global antimony mine production in 2023, while the U.S. did not mine any marketable antimony, according to the U.S. Geological Survey’s latest annual report. The U.S. has not commercially mined tungsten since 2015, and China dominates global tungsten supply, the report said.

“I think it’s the start of some export restrictions in a number of rare earths, minerals,” Tony Adock, executive chair of Tungsten Metals Group, said in a phone interview. He said he found it hard to believe that China would just restrict antimony.

“The way that the [Chinese Commerce Ministry] statement was written, we’ve extrapolated that to tungsten and other rare earths. It may not happen,” Adock said, noting that “tungsten is probably the highest economic importance.”

China’s Ministry of Commerce did not immediately respond to a request for comment.

Tungsten’s military importance

The U.S. has sought to restrict China’s access to high-end semiconductors, following which Beijing announced export controls on germanium and gallium, two metals used in chipmaking.

While tungsten is also used to make semiconductors, the metal, like antimony, is used in defense production.

“China has a declining tungsten production, but tungsten is absolutely vital, far more than antimony, in military applications,” said Christopher Ecclestone, principal and mining strategist at Hallgarten & Company.

He expects China will put export controls on tungsten by the end of the year, if not in the next month or two.

“During a situation where there’s a bit of a race to secure metals in case there is some sort of flare up in tensions, frankly we talk about South China Sea or Taiwan, you want to have as much tungsten as you can,” Ecclestone said. “But you also want people on the other side to have as least tungsten as you can engineer.”

The U.S. is already keen to reduce its reliance on China for tungsten.

Starting in 2026, the U.S. REEShore Act prohibits the use of Chinese tungsten in military equipment. That refers to the Restoring Essential Energy and Security Holdings Onshore for Rare Earths Act of 2022.

The House Select Committee on the Strategic Competition between the United States and the Chinese Communist Party in June announced a new working group on the U.S. critical minerals policy.

Ecclestone said that last week, the niche market of antimony trading noticed that the U.S. price for buying the metal from Rotterdam was exponentially higher than the price for delivery out of Shanghai. That’s after antimony prices kept rising even after pandemic-related shipping disruptions ended, he said.

“There’s a suspicion that the Pentagon has been re-stuffing its reserves of certain metals, and most notably antimony because it needs antimony for munitions,” said Ecclestone, who founded the mining strategy firm in 2003.

The U.S. Department of Defense did not immediately respond to a request for comment.

China is acting more in retaliation “against what it views as an intrusion into its national interests,” Markus Herrmann Chen, co-founder and managing director of China Macro Group, said in an email.

He pointed out that China’s Third Plenum meeting of policymakers in July “put forward a completely new policy goal of better coordinating the entire minerals value chain, likely reflecting the further heightened supply importance of ‘strategic mineral resources’ for both business and geoeconomic interests.”

Emerging alternatives

As China seeks to ensure its national security, companies in the U.S. and elsewhere are looking to tap a nascent opportunity.

“Energy Fuels has been the largest supplier of uranium oxide to the U.S. for several years supporting domestic nuclear energy production,” Mark Chalmers, president and CEO of Colorado-based Energy Fuels, said in a statement. He said the company is creating a U.S. rare earths product line.

“We recognized that our 40-year expertise working in naturally radioactive materials give us a competitive advantage to duplicate China’s success separating multiple [rare earth elements] from low-cost and plentiful monazite,” Chalmers said, referring to a mineral from which the desired metals can be extracted.

It remains unclear whether China will follow through with a blanket implementation of the latest export controls.

“They don’t want to acknowledge that this could escalate,” Black said. “But I don’t think China wants this to escalate either. The last thing you want to create is another boogey man [at] the beginning of a U.S. election. Let’s see in a week whether this is really a policy or not.”

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Berkshire advances on surge in earnings, but questions linger about cash

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Warren Buffett walks the floor ahead of the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska on May 3, 2024. 

David A. Grogen | CNBC

Berkshire Hathaway shares got a boost after Warren Buffett’s conglomerate reported a surge in operating earnings, but shareholders who were waiting for news of what will happen to its enormous pile of cash might be disappointed.

Class A shares of the Omaha-based parent of Geico and BNSF Railway rose 1.2% premarket Monday following Berkshire’s earnings report over the weekend. Berkshire’s operating profit — earnings from the company’s wholly owned businesses — skyrocketed 71% to $14.5 billion in the fourth quarter, aided by insurance underwriting, where profits jumped 302% from the year-earlier period, to $3.4 billion.

Berkshire’s investment gains from its portfolio holdings slowed sharply, however, in the fourth quarter, to $5.2 billion from $29.1 billion in the year-earlier period. Berkshire sold more equities than it bought for a ninth consecutive quarter in the three months of last year, bringing total sale of equities to more than $134 billion in 2024. Notably, the 94-year-old investor has been aggressively shrinking Berkshire’s two largest equity holdings — Apple and Bank of America.

As a result of the selling spree, Berkshire’s gigantic cash pile grew to another record of $334.2 billion, up from $325.2 billion at the end of the third quarter. 

In Buffett’s annual letter, the “Oracle of Omaha” said that raising a record amount of cash didn’t reflect a dimming of his love for buying stocks and businesses.

“Despite what some commentators currently view as an extraordinary cash position at Berkshire, the great majority of your money remains in equities,” Buffett wrote. “That preference won’t change.”

He hinted that high valuations were the reason for sitting on his hands amid a raging bull market, saying “often, nothing looks compelling.” Buffett also endorsed the ability of Greg Abek, his chosen successor, to pick equity opportunities, even comparing him to the late Charlie Munger.

Meanwhile, Berkshire’s buyback halt is still in place as the conglomerate repurchased zero shares in the fourth quarter and in the first quarter of this year, through Feb. 10.

Some investors and analysts expressed impatience with the lack of action and continued to wait for an explanation, while others have faith that Buffett’s conservative stance will pave the way for big opportunities in the next downturn.

“Shareholders should take comfort in knowing that the firm continues to be managed to survive and emerge stronger from any economic or market downturn by being in a financial position to take advantage of opportunities during a crisis,” said Bill Stone, chief investment officer at Glenview Trust Company and a Berkshire shareholder.

Berkshire is coming off a strong year, when it rallied 25.5% in 2024, outperforming the S&P 500 — its best since 2021. The stock is up more than 5% so far in 2025.

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Stocks making the biggest moves premarket: DPZ, BABA, RIVN, PLTR

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China strives to attract foreign investment amid geopolitical tensions

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Tensions between the world’s two largest economies have escalated over the last several years.

Florence Lo | Reuters

BEIJING — China is trying yet again to boost foreign investment, amid geopolitical tensions and businesses’ calls for more concrete actions.

On Feb. 19, authorities published a “2025 action plan for stabilizing foreign investment” to make it easier for foreign capital to invest in domestic telecommunication and biotechnology industries, according to a CNBC translation of the Chinese.

The document called for clearer standards in government procurement — a major issue for foreign businesses in China — and for the development of a plan to gradually allow foreign investment in the education and culture sectors.

“We are looking forward to see this implemented in a manner that delivers tangible benefits for our members,” Jens Eskelund, president of the European Union Chamber of Commerce in China, said in a statement Thursday.

The chamber pointed out that China has already mentioned plans to open up telecommunications, health care, education and culture to foreign investment. Greater clarity on public procurement requirements is a “notable positive,” the chamber said, noting that “if fully implemented,” it could benefit foreign companies that have invested heavily to localize their production in China.

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China’s latest action plan was released around the same time the Commerce Ministry disclosed that foreign direct investment in January fell by 13.4% to 97.59 billion yuan ($13.46 billion). That was after FDI plunged by 27.1% in 2024 and dropped by 8% in 2023, after at least eight straight years of annual growth, according to official data available through Wind Information.

All regions should “ensure that all the measures are implemented in 2025, and effectively boost foreign investment confidence,” the plan said. The Ministry of Commerce and National Development and Reform Commission — the economic planning agency — jointly released the action plan through the government’s executive body, the State Council.

Officials from the Commerce Ministry emphasized in a press conference Thursday that the action plan would be implemented by the end of 2025, and that details on subsequent supportive measures would come soon.

“We appreciate the Chinese government’s recognition of the vital role foreign companies play in the economy,” Michael Hart, president of the American Chamber of Commerce in China, said in a statement. “We look forward to further discussions on the key challenges our members face and the steps needed to ensure a more level playing field for market access.”

AmCham China’s latest survey of members, released last month, found that a record share are considering or have started diversifying manufacturing or sourcing away from China. The prior year’s survey had found members were finding it harder to make money in China than before the Covid-19 pandemic.

Consumer spending in China has remained lackluster since the pandemic, with retail sales only growing by the low single digits in recent months. Tensions with the U.S. have meanwhile escalated as the White House has restricted Chinese access to advanced technology and levied tariffs on Chinese goods.

‘A very strong signal’

While many aspects of the action plan were publicly mentioned last year, some points — such as allowing foreign companies to buy local equity stakes using domestic loans — are relatively new, said Xiaojia Sun, Beijing-based partner at JunHe Law.

She also highlighted the plan’s call to support foreign investors’ ability to participate in mergers and acquisitions in China, and noted it potentially benefits overseas listings. Sun’s practice covers corporates, mergers and acquisitions and capital markets.

The bigger question remains China’s resolve to act on the plan.

“This action plan is a very strong signal,” Sun said in Mandarin, translated by CNBC. She said she expects Beijing to follow through with implementation, and noted that its release was similar to a rare, high-profile meeting earlier in the week of Chinese President Xi Jinping and entrepreneurs.

That gathering on Feb. 17 included Alibaba founder Jack Ma and DeepSeek’s Liang Wenfeng. In recent years, regulatory crackdowns and uncertainty about future growth had dampened business confidence and foreign investor sentiment.

China needs to strike a balance between tariff retaliation and stabilizing FDI, Citi analysts pointed out earlier this month.

“We believe China policymakers are likely cautious about targeting U.S. [multinationals] as a form of retaliation against U.S. tariffs,” the analysts said. “FDI comes into China, bringing technology and know-how, creating jobs, revenue and profit, and contributing to tax revenue.” 

In a relatively rare acknowledgement, Chinese Commerce Ministry officials on Thursday noted the impact of geopolitical tensions on foreign investment, including some companies’ decision to diversify away from China. They also pointed out that foreign-invested firms contribute to nearly 7% of employment and around 14% of taxes in the country.

Previously, official commentary from the Commerce Ministry about any drop in FDI tended to focus only on how most foreign businesses remained optimistic about long-term prospects in China.

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