China tightens export rules for critical rare earths

China has tightened export rules for rare earths, a key element in making many high-tech products.

New regulations on “maintaining national security” issued by China’s Ministry of Commerce formally regulate existing regulations on processing technology and unauthorized overseas cooperation.

China may also block exports to foreign arms manufacturers and some semiconductor companies.

Rare earth exports are a key sticking point in months-long trade and tariff negotiations between Beijing and Washington. The news comes as Chinese President Xi Jinping and US President Donald Trump are expected to meet later this month.

Technology used to mine and process rare earths or make magnets from them can only be exported with government permission, the Commerce Department said.

Many of these technologies are already limited. In April this year, China placed a variety of rare earths and related materials on its export control list, leading to severe shortages at the time.

But the new announcement makes it clear that licenses to arms manufacturers and certain companies in the chip industry are unlikely to be issued.

Chinese companies are also prohibited from working with foreign companies on rare earths without government permission.

The United States and other Western countries accuse China of helping Russia’s war against Ukraine by allowing the export of dual technology – materials that can be used for civilian or military purposes – to Moscow. Beijing has repeatedly denied this.

The latest announcement also clarifies the specific technologies and processes that are restricted.

These include mining, smelting and separation, manufacturing of magnetic materials, and recovering rare earths from other resources.

The announcement added that the assembly, commissioning, maintenance, repair and upgrade of production equipment are also prohibited from being exported without a license.

This could have implications for the United States, which has a significant rare earth mining industry but lacks processing facilities.

The new rules create Beijing’s version of U.S. rules, prohibiting countries from selling chipmaking equipment to China.

The United States has used these measures to slow China’s development of powerful chips that could be used in artificial intelligence (AI) for military applications.

Rare earths are a group of 17 chemically similar elements that are critical to the manufacture of many high-tech products.

Most are abundant in nature, but they are called “rare” because it is very unusual to find them in pure form and very dangerous to extract.

Although you may not be familiar with the names of these rare earth elements (such as neodymium, yttrium, and europium), you will be very familiar with the products they are used in.

For example, neodymium is used to make powerful magnets used in speakers, computer hard drives, electric car engines and jet engines, making them smaller and more efficient.

China has a virtual monopoly on the mining and refining of rare earths — the process of separating them from other minerals.

The International Energy Agency (IEA) estimates that China accounts for about 61% of rare earth production and 92% of processing.

Additional reporting by BBC Monitoring’s Ian Tang.