Author Archives: Reuters News Agency

China frictions steer electric automakers away from rare earth magnets

By Eric Onstad

LONDON (Reuters) – As tensions mount between China and the United States, automakers in the West are trying to reduce their reliance on a key driver of the electric vehicle revolution – permanent magnets, sometimes smaller than a pack of cards, that power electric engines.

Most are made of rare earth metals from China.

The metals in the magnets are actually abundant, but can be dirty and difficult to produce. China has grown to dominate production, and with demand for the magnets on the rise for all forms of renewable energy, analysts say a genuine shortage may lie ahead.

Some auto firms have been looking to replace rare earths for years. Now manufacturers amounting to nearly half global sales say they are limiting their use, a Reuters analysis found.

Automakers in the West say they are concerned not just about securing supply, but also by huge price swings, and environmental damage in the supply chain.

This means managing the risk that scrapping the metals could shorten the distance a vehicle can travel between charges. Without a solution to that, the range anxiety that has long hampered the industry would increase, so access to the metals may become a competitive edge.

Rare earth magnets, mostly made of neodymium, are widely seen as the most efficient way to power electric vehicles (EVs). China controls 90% of their supply.

Prices of neodymium oxide more than doubled during a nine-month rally last year and are still up 90%; the U.S. Department of Commerce said in June it is considering an investigation into the national security impact of neodymium magnet imports.

Companies trying to cut their use include Japan’s third-largest carmaker Nissan Motor Co, which told Reuters it is scrapping rare earths from the engine of its new Ariya model.

Germany’s BMW AG did the same for its iX3 electric SUV this year, and the world’s two biggest automakers Toyota Motor Corp of Japan and Volkswagen AG of Germany have told Reuters they are also cutting back on the minerals.

Rare earths are critical for the electronics, defense and renewable energy industries. Because some can generate a constant magnetic force, the magnets they make are known as permanent magnets.

Electric cars with these require less battery power than those with ordinary magnets, so vehicles can go longer distances before recharging. They were the no-brainer choice for EV motors until about 2010 when China threatened to cut rare earth supply during a dispute with Japan. Prices boomed.

Now, supply concerns are opening a divide between Chinese EV producers and their Western rivals.

While automakers in the West are cutting down, the Chinese are still churning out vehicles using the permanent magnets. A Chinese rare earths industry official told Reuters that if geopolitical risks are set aside, China’s capacity can “fully meet the needs of the world’s automotive industry.”

Altogether, based on sales data from JATO Dynamics, manufacturers accounting for 46% of total light vehicle sales in 2020 have said they have scrapped, plan to eliminate, or are scaling down rare earths in electric vehicles.

And new ventures are springing up to develop electric motors without the metals, or to boost recycling of the magnets used in existing vehicles.

“Companies that spend tens or hundreds of millions developing a family of products… they don’t want to put all their eggs in one basket – that’s the Chinese basket,” said Murray Edington, who runs the Electrified Powertrain department at British consultancy Drive System Design. “They want to develop alternatives.”

BMW says it has redesigned its EV technology to make up for a lack of rare earths; Renault SA has slotted its rare-earth-free Zoe model into a growing niche of small urban cars that do not need extended driving ranges.

Tesla Inc, the U.S. EV giant whose $621 billion market value is just below that of the top five automakers combined – is opting for both types of motors.

“You’re pulling your hair deciding whether you think supplies will be viable in the future and at what price,” said Ryan Castilloux of Canada-based consultancy Adamas Intelligence.

His consultancy expects global consumption of rare earths for magnets to climb to $15.7 billion by 2030, nearly four times this year’s value.

EVS AND WIND TURBINES

Neodymium is a mighty metal. The neodymium magnets in a typical EV weigh up to 3kg (6 lb), but even at 1/12th of that weight, a neodymium magnet can support steel as heavy as prizefighter Tyson Fury, and will have about 18 times more magnetic energy than the standard variety, British magnet company Bunting told Reuters.

Even though the pandemic has dented auto sales, demand for these magnets in electric vehicles shot up by 35% last year alone to 6,600 tonnes, Adamas Intelligence says.

The permanent magnets in hybrid and EV motors cost more than $300 per vehicle or up to half the cost of the motor, analysts say.

Analysts at investment bank UBS expect electric models to make up half of global new car sales by 2030, up from only 4% last year. The magnets are also in demand for wind turbines, global installations of which jumped 53% last year, according to the industry trade group.

Over the past two decades, Western countries largely withdrew from producing rare earth metals, which involves complex processing and often noxious byproducts. Today, China’s dominance runs through the entire production chain.

“The upstream rare earth supply chain, including mining and processing, is definitely a big concern, but when it comes to actual RE magnet production, China has an even tighter grip,” said David Merriman at Roskill, a critical materials consultancy in London.

NOT ENOUGH

For many EV drivers, range anxiety may not be an issue.

“Most people are driving less than 100 miles a day, so for that you can have a less efficient motor,” said researcher Jürgen Gassmann at Fraunhofer IWKS in Germany.

Even so, automakers in the West have adopted a range of strategies. Some, like Toyota, still use permanent magnets but have trimmed use of rare earths, developing a magnet that needs 20%-50% less neodymium.

Others, like BMW, have undertaken major redesigns: The German carmaker told Reuters it overhauled its drive unit to combine motor, electronics and transmission in a single housing, cutting down on space and weight.

“Our goal for the future is to avoid rare earths as much as possible and to become independent of possible cost, availability and – of course – sustainability risks,” said Patrick Hudde, BMW’s vice president of raw material management.

Tesla started in 2019 to combine engine types. Its S and X models have two motors: one with rare earth magnets, one without. The induction motor provides more power, while the one with permanent magnets is more efficient, Tesla said: Including a rare earth motor boosted the models’ driving range by 10%. Volkswagen also uses both types of motors on its new ID.4 crossover SUV, it said.

The use of non-rare-earth electric motors is set to jump nearly eightfold by 2030, according to Claudio Vittori, senior analyst of e-mobility at data analytics company IHS Markit. But he said permanent magnet motors will still dominate, mainly because of their power and efficiency.

If the forecasts are correct, it’s not certain that even these tweaks can cool the market.

“I think we need these innovations to help balance the really strong demand growth that we’re looking at,” Castilloux says. “There’s almost no scenario where supply will be enough.”

(Additional reporting by Eimi Yamamitsu in Tokyo, Jan Schwartz in Hamburg, Christoph Steitz in Frankfurt, Yilei Sun in Beijing and Tom Daly; edited by Veronica Brown and Sara Ledwith)

U.S. judge gives Florida man 8 months in prison in Capitol attack

By Mark Hosenball

WASHINGTON (Reuters) – A federal judge on Monday handed down an eight-month prison sentence to Floridian Paul Hodgkins for his role in the Jan. 6 attack on the U.S. Capitol, making him the first among hundreds of accused rioters facing prosecution to be incarcerated.

Hodgkins, 38, pleaded guilty on June 2 to obstruction of an official proceeding, as Congress was in the process of formally certifying Joe Biden’s election last November as U.S. president when supporters of former President Donald Trump rampaged through the building.

At a sentencing hearing on Monday, prosecutor Mona Sedky told U.S. District Judge Randolph Moss that Hodgkins, a Tampa resident, donned goggles before entering the Senate chamber during the riot and “proudly posed for selfies,” which he texted to friends.

Sedky acknowledged that Hodgkins did not destroy any property “and he did not injure anyone.”

In a statement to the court, Hodgkins said he was “remorseful and regretful” for his actions in Washington and acknowledged that these actions may have emboldened others to engage in destructive acts.

“This was a foolish decision on my part that I take full responsibility for,” Hodgkins told the court.

Moss agreed that Hodgkins had not been violent, did not threaten anyone and did not organize the Capitol attack. But the judge said that Hodgkins went to the Capitol “to impede the certification of the election, and he admitted that he did so.”

The judge said that while he believes that Hodgkins’ participation in the riot was an “aberration in his life,” he also believed that the Jan. 6 attack had “tarnished” U.S. history and that it is necessary to deter future rioters.

More than 535 people have been charged with taking part in the attack, an unsuccessful attempt to stop Congress from certifying Biden’s victory over Trump, who had falsely claimed the election was stolen from him through widespread voting fraud.

While other accused Jan. 6 rioters have entered guilty pleas, Hodgkins became the first to be sentenced to prison.

(Reporting by Mark Hosenball; Editing by Will Dunham)

Britain issues first Amber Extreme Heat warning

LONDON (Reuters) – Britain’s Met Office issued its first ever amber extreme heat warning on Monday, saying unusually high temperatures expected western areas and continuing high night-time temperatures created potential risks to health.

The alert is the first issued by the Met Office since the national meteorological service launched its extreme heat national severe weather warning system at the start of June to help better inform people of the risks hot weather can bring.

Much of Britain has seen heatwave conditions in recent days but temperatures are expected to rise further, possibly reaching 33 degrees Celsius in some western parts of the country, the Met Office said.

“The impacts of extreme heat can be many and varied. It can have health consequences, especially for those who are particularly vulnerable, and it can impact infrastructure, including transport and energy, as well as the wider business community,” the Met Office said in a statement.

A record-breaking heatwave this month killed hundreds of people in Canada and the United States. Europe also has been unusually hot and flooding has devastated parts of Germany, Belgium and other countries.

(Reporting By Susanna Twidale; editing by Philippa Fletcher)

Biden says inflation temporary; Fed should do what it deems necessary for recovery

By Steve Holland and Andrea Shalal

WASHINGTON (Reuters) -U.S. President Joe Biden on Monday said an increase in prices was expected to be temporary, but his administration understood that unchecked inflation over the longer term would pose a “real challenge” to the economy and would remain vigilant.

Biden said he told Federal Reserve Board Chair Jerome Powell recently that the Fed was independent and should take whatever steps it deems necessary to support a strong, durable recovery.

“As our economy comes roaring back, we’ve seen some price increases,” Biden said, while rejecting concerns the recent increases could be a sign of persistent inflation.

He said his administration was doing all it could to address supply chain bottlenecks that had pushed up the price of cars, and noted that lumber prices were now easing after spiking higher early in the recovery.

“I want to be clear: my administration understands that were we ever to experience unchecked inflation in the long term, that would pose a real challenge for our economy,” he said. “While we’re confident that isn’t what we’re seeing today, we’re going to remain vigilant about any response that is needed.”

Biden said he had also made that point clear to Powell: “The Fed is independent. It should take whatever steps it deems necessary to support a strong, durable economic recovery.”

Growing concerns about inflation dragged U.S. consumer sentiment in early July to its lowest level in five months, a survey showed Friday, after a 0.9% jump in consumer prices in June, the biggest increase in 13 years, but economists continue to believe that higher inflation is transitory.

The Democratic president said his plans to invest more in infrastructure, as well as better care for older people and children, would help reduce inflationary pressures in the future by boosting productivity.

“These steps will enhance our productivity, raising wages without raising prices,” he said. “It will take the pressure off of inflation, give a boost to our workforce which leads to lower prices in the years ahead.”

He said critics had warned repeatedly that his economic policies would lead to an end to capitalism, but economists were now predicting the United States would hit its highest economic growth rate in 40 years.

“It turns out capitalism is alive and very well,” he said. “We’re making serious progress to ensure that it works the way it’s supposed to work for the good of the American people.”

(Reporting by Steve Holland and Andrea Shalal; Editing by Andrea Ricci)

U.S. and allies accuse China of global hacking spree

By Steve Holland and Doina Chiacu

WASHINGTON (Reuters) – The United States and its allies accused China on Monday of a global cyberespionage campaign, mustering an unusually broad coalition of countries to publicly call out Beijing for hacking.

The United States was joined by NATO, the European Union, Britain, Australia, Japan, New Zealand and Canada in condemning the spying, which U.S. Secretary of State Antony Blinken said posed “a major threat to our economic and national security.”

Simultaneously, the U.S. Department of Justice charged four Chinese nationals – three security officials and one contract hacker – with targeting dozens of companies, universities and government agencies in the United States and abroad.

The Chinese Embassy in Washington did not immediately respond to a request for comment. Chinese officials have previously said China is also a victim of hacking and opposes all forms of cyberattacks.

While a flurry of statements from Western powers represent a broad alliance, cyber experts said the lack of consequences for China beyond the U.S. indictment was conspicuous. Just a month ago, summit statements by G7 and NATO warned China and said it posed threats to the international order.

Adam Segal, a cybersecurity expert at the Council on Foreign Relations in New York, called Monday’s announcement a “successful effort to get friends and allies to attribute the action to Beijing, but not very useful without any concrete follow-up.”

Some of Monday’s statements even seemed to pull their punches. While Washington and its close allies such as the United Kingdom and Canada held the Chinese state directly responsible for the hacking, others were more circumspect.

NATO merely said that its members “acknowledge” the allegations being leveled against Beijing by the U.S., Canada, and the UK. The European Union said it was urging Chinese officials to rein in “malicious cyber activities undertaken from its territory” – a statement that left open the possibility that the Chinese government was itself innocent of directing the espionage.

The United States was much more specific, formally attributing intrusions such as the one that affected servers running Microsoft Exchange earlier this year to hackers affiliated with China’s Ministry of State Security. Microsoft had already blamed China.

U.S. officials said the scope and scale of hacking attributed to China has surprised them, along with China’s use of “criminal contract hackers.”

“The PRC’s Ministry of State Security (MSS) has fostered an ecosystem of criminal contract hackers who carry out both state-sponsored activities and cybercrime for their own financial gain,” Blinken said.

U.S. security and intelligence agencies outlined more than 50 techniques and procedures that “China state-sponsored actors” use against U.S. networks, a senior administration official said.

Washington in recent months has focused heavy attention on Russia in accusing Russian hackers of a string of ransomware attacks in the United States.

The senior administration official said U.S. concerns about Chinese cyber activities have been raised with senior Chinese officials. “We’re not ruling out further action to hold the PRC accountable,” the official said.

The United States and China have already been at loggerheads over trade, China’s military buildup, disputes about the South China Sea, a crackdown on democracy activists in Hong Kong and treatment of the Uyghurs in the Xinjiang region.

Blinken cited the Justice Department indictments as an example of how the United States will impose consequences.

The defendants and officials in the Hainan State Security Department, a regional state security office, tried to hide the Chinese government’s role in the information theft by using a front company, according to the indictment.

The campaign targeted trade secrets in industries including aviation, defense, education, government, health care, biopharmaceutical and maritime industries, the Justice Department said.

Victims were in Austria, Cambodia, Canada, Germany, Indonesia, Malaysia, Norway, Saudi Arabia, South Africa, Switzerland, the United Kingdom and the United States.

“These criminal charges once again highlight that China continues to use cyber-enabled attacks to steal what other countries make, in flagrant disregard of its bilateral and multilateral commitments,” Deputy U.S. Attorney General Lisa Monaco said in the statement.

(Reporting by Steve Holland, David Shepardson, Doina Chiacu and Lisa Lambert; Editing by Chizu Nomiyama and Grant McCool)

Heavy rains cripple Indian cities; at least 35 killed

MUMBAI (Reuters) – India’s capital New Delhi and the main financial center of Mumbai were drenched with heavy rain on Monday, a day after at least 35 people were killed across the country in landslides and house collapses triggered by downpours.

The Indian Meteorological Department (IMD) has predicted heavy to very heavy rain in north India, including New Delhi, over the next two days. In Mumbai, the IMD has issued a heavy rain and thunderstorm alert for the city and surrounding districts.

At least 30 people were killed on Sunday in three Mumbai suburbs when several houses collapsed in landslides after rain.

At least three people were also killed when a house collapsed in the northern state of Uttarakhand after a downpour, Reuters partner agency ANI reported.

In a separate incident on Sunday evening, a three-story building collapsed in the city of Gurugram, bordering Delhi. Two people were killed and rescue operations were still underway.

Several low-lying areas of Delhi and Mumbai were flooded and Twitter was filled with images of submerged vehicles and people wading through waist-deep water.

Mumbai’s water treatment plant in the suburbs was flooded on Sunday forcing the municipal council to impose water cuts in some parts of the city.

India is in the midst of its annual rainy season but the downpours over the past few days have been particularly heavy.

Extreme weather has hit several parts of the world in recent weeks with flooding in Europe, dam collapses in China and heatwaves in North America adding to worries about climate change.

(Reporting by Swati Bhat; Editing by Raju Gopalakrishnan, Robert Birsel)

Some 170 still missing around Koblenz, victim numbers set to rise – police

BERLIN (Reuters) – Some 170 people are still listed as missing the area of western Germany hardest hit by deadly flooding, Koblenz deputy police chief Juergen Sues said on Monday, adding the number of victims would surely rise.

Criminal police chief Stefan Heinz added that he expected many bodies were in places the police had not yet reached or where flood waters had still not receded from.

“The focus of our work is on giving certainty as soon as possible,” Heinz told a news conference. “And that includes identifying the victims.”

(Reporting by Thomas Escritt; Editing by Douglas Busvine)

U.N. Security Council asked to authorize more troops for Mali mission

By Paul Lorgerie

BAMAKO (Reuters) – United Nations Secretary-General Antonio Guterres has asked the Security Council to authorize additional troops for the peacekeeping mission in Mali in response to rising violence by Islamist militants, according to a report seen by Reuters.

The proposed increase of 2,069 soldiers and police officers would take the authorized size of the mission, known as MINUSMA, to 17,278 uniformed personnel, the largest since it was established in 2013.

Guterres made the proposal in a report to Security Council members that is dated July 15 but has not yet been released publicly.

He said additional personnel were needed to respond to Islamist militants, many tied to al Qaeda and Islamic State, who have expanded their operations from their strongholds in the desert north into Mali’s center and neighboring countries.

“Scaling up MINUSMA’s uniformed personnel capacity would enhance the ability of the Mission to protect civilians in central Mali and create further space for the peace process in the North,” Guterres said.

The additional 2,069 personnel would include 1,730 soldiers and 339 police officers. Three quick reaction force companies, comprising 750 personnel in total, and two helicopter units with 260 members would be created.

In central Mali, the epicenter of the conflict in recent years, additional troops would be used to create forward operating bases “to expand the reach and mobility of the Mission”, the report said.

Guterres said the plan could only work in concert with stepped-up efforts by Malian authorities to bolster security and enhance governance.

But the proposal comes as Malian forces increasingly pull back from the hotspots in the countryside where they have suffered steep losses, effectively ceding control to the militants.

Former colonial power France has also announced plans to begin drawing down its 5,100-strong taskforce that targets the militants across West Africa’s Sahel region.

Meanwhile, Mali is mired in political uncertainty after military officers in May conducted their second coup in nine months.

(Additional reporting and writing by Aaron Ross; Editing by Sandra Maler)

France reports over 10,000 new coronavirus cases per day again

PARIS (Reuters) – France reported more than 10,000 new coronavirus cases again as the rapid spread of the more contagious Delta variant led to a jump in new infections.

The health ministry reported 10,908 new cases on Friday, taking the total to more than 5.84 million. The daily new case tally was last over 10,000 at the end of May.

The seven-day moving average of new cases rose further to 5,795, after jumping over the key threshold of 5,000 on Wednesday.

The closely watched metric – which smooths out daily reporting irregularities – had risen as high as 42,000 per day in mid-April and fallen back to less than 2,000 per day in late June.

But since then, week-on-week percentage increases in new cases have risen every day, from more than 50% last week to more than 100% on Wednesday and nearly 140% on Friday. On Thursday, the number of reported cases fell following the July 14 national holiday.

Hospital numbers for COVID-19 continued their weeks-long fall, but the rate of decline slowed further. The number of COVID-19 patients in hospital fell below 7,000 for the first time since early October and the number of people in intensive care with the disease fell below 900.

The ministry also reported 22 new deaths from COVID-19, taking the total to 111,451.

(Reporting by Geert De Clercq; Editing by Chris Reese and Alex Richardson)

U.S. sanctions Chinese officials over Hong Kong democracy crackdown

By Michael Martina and David Brunnstrom

WASHINGTON (Reuters) -The United States imposed sanctions on Friday on seven Chinese officials over Beijing’s crackdown on democracy in Hong Kong, Washington’s latest effort to hold China accountable for what it calls an erosion of rule of law in the former British colony.

The sanctions, posted by the U.S. Treasury Department, target individuals from China’s Hong Kong liaison office, used by Beijing to orchestrate its policies in the Chinese territory.

The seven people added to Treasury’s “specially designated nationals” list were Chen Dong, He Jing, Lu Xinning, Qiu Hong, Tan Tienui, Yang Jianping, and Yin Zonghua, all deputy directors at the liaison office according to online bios.

U.S. Secretary of State Antony Blinken said that Chinese officials over the past year had “systematically undermined” Hong Kong’s democratic institutions, delayed elections, disqualified elected lawmakers from office, and arrested thousands for disagreeing with government policies.

“In the face of Beijing’s decisions over the past year that have stifled the democratic aspirations of people in Hong Kong, we are taking action. Today we send a clear message that the United States resolutely stands with Hong Kongers,” Blinken said in a statement.

The Treasury Department referred to a separate updated business advisory issued jointly with the departments of State, Commerce, and Homeland Security that highlighted U.S. government concerns about the impact on international companies of Hong Kong’s national security law.

Critics say Beijing implemented that law last year to facilitate a crackdown on pro-democracy activists and a free press.

The advisory said companies face risks associated with electronic surveillance without warrants and the surrender of corporate and customer data to authorities, adding that individuals and businesses should be aware of the potential consequences of engaging with sanctioned individuals or entities.

The actions were announced just over a year after former President Donald Trump ordered an end to Hong Kong’s special status under U.S. law to punish China for what he called “oppressive actions” against the territory.

The United States has already imposed sanctions on other senior officials, including Hong Kong leader Carrie Lam and senior police officers, for their roles in curtailing political freedoms in the territory.

BROKEN COMMITMENT

President Joe Biden said at a news conference on Thursday that the Chinese government had broken its commitment on how it would deal with Hong Kong since it returned to Chinese control in 1997.

China had promised universal suffrage as an ultimate goal for Hong Kong in its mini-constitution, the Basic Law, which also states the city has wide-ranging autonomy from Beijing.

Since China imposed the national security law to criminalize what it considers subversion, secessionism, terrorism or collusion with foreign forces, most pro-democracy activists and politicians have found themselves ensnared by it or arrested for other reasons.

Apple Daily, Hong Kong’s most vocal pro-democracy newspaper, was forced to end a 26-year run in June amid the crackdown that froze the company’s funds.

Chinese Foreign Ministry spokesman Zhao Lijian said at a regular news conference in Beijing before the actions were formally announced that the United States should stop interfering in Hong Kong, and that China would make a “resolute, strong response.”

A source told Reuters on Thursday that the White House was also reviewing a possible executive order to facilitate immigration from Hong Kong, but that it was still not certain to be implemented.

U.S. Deputy Secretary of State Wendy Sherman is preparing a visit to Japan, South Korea and Mongolia next week. The State Department’s announcement of her trip made no mention of any stop in China, which had been anticipated in foreign policy circles and reported in some media.

A senior State Department official told reporters on Friday that Washington was still in talks with Beijing over whether Sherman would visit China.

The U.S. government on Tuesday also strengthened warnings to businesses about the growing risks of having supply chain and investment links to China’s Xinjiang region, citing forced labor and human rights abuses there, which Beijing has denied.

(Reporting by Michael Martina, David Brunnstrom, Doina Chiacu, Humeyra Pamuk, and David Shepardson; Editing by Paul Simao)