China tightens export rules for crucial rare earths

China has tightened its rules on the export of rare earth elements, which are vital in the production of many high-tech products.

The new regulations, announced by the country’s Ministry of Commerce “in order to protect national security”, formalize existing rules on processing technology and unauthorized overseas cooperation.

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

Rare earth exports are a major sticking point in months-long negotiations between Beijing and Washington over trade and tariffs. The announcement comes as Chinese President Xi Jinping and his US counterpart Donald Trump are expected to meet later this month.

The Ministry of Commerce said that technology used in rare earth mining and processing or making magnets from rare earths can be exported only with government permission.

Many of these technologies are already limited. China added several rare earth elements and related materials to its export control list in April, which caused a major shortage at the time.

However, the new announcement makes it clear that licenses are unlikely to be granted to arms manufacturers and some companies in the chip industry.

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

China is accused by the United States and other Western countries of aiding Russia’s war against Ukraine by allowing bilateral technology exports that could be used for civilian or military purposes to be sent 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, magnetic material production, and recycling rare earths from other sources.

The announcement stated that the assembly, debugging, maintenance, repair and upgrade of production equipment is also prohibited from being exported without permission.

This could have an impact on the US, which has a significant rare earth mining industry but no processing facilities.

The new regulations constitute Beijing’s version of US rules that prevent countries from selling chipmaking equipment to China.

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

Rare earths are a group of 17 chemically similar elements that are vital in the production of many high-tech products.

Most of them are abundant in nature, but they are known as “rare” because they are very rare to find in pure form and very dangerous to extract.

While 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 in which they are used.

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

China has a near monopoly on mining and refining rare earths (the process of separating them from other minerals).

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

Additional reporting by BBC Monitoring’s Ian Tang.