China, the world’s leading producer of rare earths, has extended its export ban to include technology used in the production of rare earth magnets, in addition to the existing ban on technology for extracting and separating these crucial materials.
Rare earths encompass a group of 17 metals critical for creating magnets that power electric vehicles, wind turbines, and electronics.
Nathan Picarsic, co-founder of the geopolitical consulting firm Horizon Advisory, emphasized the need for diversifying supply chains, stating that reliance on China at any stage of the value chain is unsustainable.
In December, China’s commerce ministry invited public input on the potential inclusion of technology related to smarium-cobalt magnets, neodymium-iron-boron magnets, and cerium magnets in its “Catalogue of Technologies Prohibited and Restricted from Export.”
Additionally, they prohibited technology for rare-earth calcium oxyborate and production technology for rare earth metals, expanding the previous ban on rare earth alloy materials.
These measures are aimed at safeguarding national security and public interests.
China has been implementing stricter regulations on the export of various metals, intensifying its struggle with Western nations over control of essential minerals.
In August, export permits were introduced for chipmaking materials like gallium and germanium, followed by similar requirements for specific types of graphite from December 1.
Don Swartz, CEO of American Rare Earths, emphasized that China is determined to maintain its market dominance, characterizing the situation as a race.
This move to protect its rare earth technology coincides with efforts by Europe and the United States to reduce their reliance on Chinese rare earths, which constitute nearly 90% of global refined output.
China’s mastery of the solvent extraction process for refining these minerals has presented challenges to Western rare earth companies like MP Materials, primarily due to technical complexities and pollution concerns. Following China’s announcement, MP’s stock surged by over 10%.
Ucore Rare Metals reported the completion of a facility for testing its own rare earths processing technology, funded in part by the U.S. Department of Defense.
Ucore CEO Pat Ryan highlighted the necessity for new technologies to break China’s grip on these critical areas, resulting in a more than 16% increase in the company’s stock.
It is unclear to what extent China’s rare earths technology is actively exported. Beijing has discouraged such exports for years, according to Constantine Karayannopoulos, former CEO of Neo Performance Materials, which separates rare earths in Estonia.
Karayannopoulos believes that this announcement formalizes what was already widely known.