China Tightens Rare-Earth Export Controls

China announced stricter export controls on rare earths and related technologies, requiring foreign firms to obtain special approval to ship products containing even trace amounts of China‑sourced rare earth elements.

The Commerce Ministry also introduced permitting rules for technologies tied to mining, smelting, recycling and magnet manufacture, citing national security concerns and alleging transfers that harmed state interests. Enforcement mechanisms for overseas activity were not detailed.

China supplies roughly 70% of global rare‑earth mining and about 90% of processing, giving it leverage over inputs used in jet engines, radar, electric vehicles and permanent magnets for military and civilian systems. The move comes amid heightened U.S.‑China trade tensions and ahead of a planned meeting between the two leaders.

Analysts say the policy mirrors export controls on advanced chips and will accelerate efforts to build independent mine‑to‑magnet supply chains outside China. Anticipated consequences include denied licenses for military end‑uses, supply disruptions for manufacturers, and increased public and private investment in alternative sources and domestic processing capacity. Examples of supply‑chain shifts include commercial deals and expansions in Australia, the U.S., and other markets aimed at reducing dependence on Chinese processing.