China has moved to tighten its export controls on rare earths and related technologies, just weeks before President Donald Trump is set to meet with President Xi Jinping.
Foreign entities wishing to export any products containing over 0.1% of domestically-sourced rare earths, or manufactured using China’s extraction, refining, magnet-making, or recycling technology, must obtain a license from Beijing. China has also prohibited its citizens from participating in unauthorized mining overseas.
The move comes amid persistent trade tensions between Washington and Beijing and the growing importance of rare earths, which are critical to U.S. defense and technology. In an opinion piece in The Dallas Express last year, Rich Nolan, president and CEO of the National Mining Association, stated that China routinely uses rare earths as leverage in negotiations with the United States.
“Each time the U.S. confronts China over its trade practices—such as the stealing of intellectual property—or puts in place tariffs on Chinese products, Beijing reaches for the minerals lever. The implicit message is: ‘Push too hard, Washington, and we won’t just restrict the supply of what you need, we’ll cut it off,’” wrote Nolan.
China’s Ministry of Commerce said that to prevent the “misuse” of rare-earth minerals in the military and other sensitive sectors, companies linked to foreign militaries or placed on certain lists will not be given permits.
China accounts for roughly 70% of the world’s entire rare earth supply.
Dan Wang, China director at Eurasia Group, says the latest announcement from Beijing represents a “major upgrade for rare earth export control,” per CNBC.
According to Wang, the move could force other countries to increasingly rely on Chinese know-how while helping Beijing enhance its own domestic industry.
In August, The Dallas Express reported that the Pentagon issued its first direct loan under a new strategic capital program to support the expansion of America’s domestic rare earth industry. The $150 million loan was provided to MP Materials to support rare earth processing capabilities at its facility in California.