China tightens rare earth export controls, targets defence, semiconductor users

China tightened its rare earth export controls on Thursday, expanding restrictions on processing technology, barring unauthorised overseas cooperation and spelling out its intention to limit exports to overseas defence and semiconductor users.

The announcement from the Ministry of Commerce clarifies and expands sweeping controls announced in April that caused massive shortages around the world before a series of deals with Europe and the U.S. resumed shipments.

China accounts for about 60% of global mine production and 90% of processed and permanent magnet output. Rare earths are vital materials in products from electric vehicles to aircraft engines and military radars.


Restrictions on exporting the technology to make rare earth magnets will be expanded to more types of magnets. Equipment used to recycle rare earths will now also require a licence to export, adding it to the long list of rare earth processing technology China has restricted.

Manufacturers overseas using any Chinese components or machinery must also apply for licences to export controlled items, the ministry said.

The announcement also clarified for the first time some of the targets of China's restrictions. Overseas defence users will not be granted licences, the ministry said, while applications related to advanced semiconductors will only be approved on a case-by-case basis.

Chinese companies working overseas are also barred from working with companies overseas on rare earths without permission from the ministry.