By Ernest Scheyder and Lewis Jackson
(Reuters) – A Chinese company has stopped exporting a piece of equipment used to process the electric vehicle battery metal lithium, in the clearest sign yet manufacturers are already implementing export controls proposed by Beijing.
Jiangsu Jiuwu Hi-Tech told customers last month it would stop exporting a piece of filtration equipment known as a sorbent from February 1, according to a source with direct knowledge of the matter and documents seen by Reuters.
China is the world’s largest producer of sorbents, used to extract lithium from brines or other solutions containing the battery metal, although its market size can be difficult to ascertain given Beijing’s reticence to share data, analysts say.
The decision by Jiangsu shows Beijing’s threat, made public in January, to restrict the export of some battery and lithium technology, including sorbents, is changing behaviour even though the change is for now only a proposal. If approved, companies would need government licenses for overseas sales.
An executive at another lithium extraction technology company, also speaking on condition of anonymity, said Jiangsu and Sunresin New Materials, another major sorbent producer, are negotiating with the government over the proposal.
Representatives for Jiangsu and Sunresin did not respond to questions from Reuters. Sunresin’s chairman said a month ago the company’s overseas expansion plans included transferring technology to customers.
Beijing has not publicly discussed the proposal since it was released last month.
Some in the industry consider it is already a deterrent to exporting listed items to unfriendly countries. A China-based international lawyer with clients in the clean energy industry said it was having a “chilling effect”.
Officials with China’s Ministry of Commerce have visited several companies to discuss the proposal and in one case, warned against proceeding with a $1 billion export deal that is being negotiated, the lawyer said, speaking on condition of anonymity because of the sensitivity of the issue.
Banks are also asking for extra approvals before signing off on export finance for items on the list, the person added.
China’s Ministry of Commerce did not respond to questions from Reuters.
While it is unclear how restrictive the curbs would be if implemented, the proposal alone underscores Beijing’s willingness to use its dominance of the mining and processing of lithium and many other critical minerals as leverage in its escalating trade war with Washington.