China’s Move to Restrict Rare Earth Technology Export

China has recently taken a significant step in prohibiting the export of essential technology for the extraction and separation of rare earth metals, in a bid to preserve its dominance in the industry. This new development is aimed at safeguarding national security and public interest, as reported by Reuters.

Rare earth metals are a group of 17 essential elements that play a critical role in the production of magnets used in electric vehicles, wind turbines, and various electronic devices. The Chinese commerce ministry has sought public opinion on the potential addition of technologies for creating different types of magnets to its list of prohibited and restricted export technologies.

The recent update to the catalogue also includes a ban on technology for producing rare-earth calcium oxyborate and rare earth metals, expanding upon an earlier restriction on the production of rare earth alloy materials. This signifies a significant move by China to protect its rare earth technology and increase regulations on the export of several metals, highlighting growing tension with Western countries.

In August, China introduced export permits for chipmaking materials such as gallium and germanium, with similar requirements for various types of graphite imposed since 1 December 2023. This decision comes at a time when Europe and the US are actively seeking to reduce their dependence on Chinese rare earths.

In terms of global market share, estimations indicate that China holds over 90% of the market for samarium cobalt magnets and approximately 84% of the neodymium magnet market. The trade conflict between the US and China has significantly influenced international trade and prompted the US to enact a series of trade restrictions over the years to diminish China’s influence in key sectors.

It is anticipated that there will be a greater need for rare earth elements in the upcoming years, particularly in sustainable energy projects. GlobalData suggests that by revising its list of technologies that are off-limits for export, China aims to consolidate its command over the rare earth magnet market and secure its position in the emerging energy transition industry.

This move by China to protect its rare earth technology signals a stronger push towards the retention of crucial resources and technologies, potentially impacting the global supply chain for rare earth elements. As tensions continue to rise between China and Western countries, the implications of this decision are likely to reverberate across various industries reliant on rare earth metals.

In conclusion, China’s decision to prohibit the export of rare earth processing technologies underscores the escalating competition for control over vital minerals and technologies, and it will be interesting to observe the evolving dynamics in the global rare earth industry in the coming years.