June 23 (Reuters) – The Biden administration on Wednesday ordered a ban on U.S. imports of a key solar panel material from Chinese company Hoshine Silicon Industry Co (603260.SS) over allegations of forced labor, have said two sources informed about it.
The US Department of Commerce has separately restricted exports to Hoshine, three other Chinese companies and the paramilitary Xinjiang Production and Construction Corps (XPCC), claiming they were involved in the forced labor of Uyghurs and other Muslim minority groups in Xinjiang. .
The other three companies added to the US economic blacklist include Xinjiang Daqo New Energy Co, a unit of Daqo New Energy Corp (DQ.N); Xinjiang East Hope Nonferrous Metals Co, a subsidiary of Shanghai-based manufacturing giant East Hope Group; and Xinjiang GCL New Energy Material Co, which is part of GCL New Energy Holdings Ltd (0451.HK).
The Commerce Department said the companies and XPCC “have been implicated in human rights violations and abuses in the implementation of China’s campaign of repression, mass arbitrary detention, forced labor and high-tech surveillance against Uyghurs, Kazakhs and other members of Muslim minority groups. in »Xinjiang.
At least some of the companies listed by the Commerce Department are major manufacturers of monocrystalline silicon and polysilicon used in the production of solar panels.
The companies or their parent companies did not immediately respond to requests for comment or could not be immediately contacted. XPCC could not immediately be reached for comment.
The immediate effect of the restrictions would be limited because the named companies do not have “broad contracts” with US-based wafer companies, said Dennis Ip, regional research manager for Electricity, Utilities, Renewables and environment (PURE) at Daiwa clients.
“However, we see the possibility that the ban will gradually be extended to include restrictions on all solar modules containing polysilicon produced in Xinjiang,” he said.
Chinese module producers could still use polysilicon from Inner Mongolia and Yunnan for their module shipments to the United States, he added.
About 45% of all polysilicon used in solar module production is produced in Xinjiang, with 35% produced in other parts of China. The rest come from outside of China.
The global solar energy supply chain has been strangled by record polysilicon, labor and freight costs. Read more
When asked to comment, the Chinese Embassy in Washington referred on Tuesday to remarks by Chinese Foreign Ministry spokesman Zhao Lijian, who dismissed charges of genocide and forced labor in Xinjiang as “Nothing but rumors with ulterior motives and outright lies”.
The US Customs and Border Protection Wayhold Release Order only blocks imports of material from Hoshine. A source close to the order said it had no impact on the majority of U.S. imports of polysilicon and other silica-based products.
A second source said the move did not conflict with President Joe Biden’s climate goals and his support for the domestic solar industry.
The Biden administration announced in March a goal of reducing the cost of solar power by 60% over the next 10 years. President Biden has set himself the goal of a 100% clean electricity grid by 2035.
The sources said the United States is continuing to investigate allegations of forced labor by Chinese companies that supply polysilicon.
The Xinjiang region accounts for about 45% of the world’s supply of solar-grade polysilicon, according to a report by solar industry analysts.
Both sources close to politics said the White House saw the actions as a “natural sequel” to the G7 deal earlier this month to remove forced labor from supply chains.
“We consider these three actions to put this commitment into action,” said one of the sources. “We believe these actions demonstrate a commitment to impose additional costs on the PRC for engaging in cruel and inhumane forced labor practices. “
The XPCC, a paramilitary organization sent to Xinjiang in the 1950s to build farms and settlements, remains powerful in the region’s energy and agricultural sectors, functioning almost as a parallel state. Read more
Foreign governments and human rights activists say he has been a force in suppressing and monitoring Uyghurs in the region, running some detention camps. Last year, the US Treasury Department sanctioned the XPCC for “serious violations of rights against ethnic minorities.”
Report by Karen Freifeld and David Shepardson Edited by Chris Reese
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