China Escalates Rare Earth Export Controls

In a significant move to assert its dominance over the global rare earth market, China has announced expanded export controls on Thursday, tightening restrictions on processing technology and barring unauthorized overseas collaborations. The Ministry of Commerce's directive aims to cut off supplies to overseas defense and semiconductor industries.

This development builds on sweeping controls announced in April that triggered substantial global shortages, only partially alleviated through agreements with Europe and the U.S. China stands as a powerhouse in the rare earth sector, accounting for about 60% of global mine production and a staggering 90% of processed and permanent magnet output—key components in electric vehicles, aircraft engines, and military radars.

The latest restrictions implicate all facets of the rare earth processing industry, requiring licenses for exporting technology used in manufacturing and recycling rare earth magnets. Chinese components or machinery users abroad must also comply with stringent licensing requirements, while overseas defense users and certain semiconductor applications face stringent scrutiny and possible denials of export permissions.

(With inputs from agencies.)