By Wu Qiaoxi and AFP | 2025-10-09

China has announced new export controls on rare earths, expanding licensing requirements to related technologies and companies outside China to "safeguard national security and interests."

The measures, introduced on October 9, prohibit unauthorized export of technologies related to rare earth mining, processing and magnet manufacturing. They also apply to technologies used in the "assembly, adjusting, maintenance, repair and upgrading of production lines," the Ministry of Commerce said. The controls take effect immediately and build upon the licensing requirements for rare earth magnets introduced in April.

Seeking to control technology

China is the world's leading producer of the critical minerals used to manufacture magnets essential for the automotive, electronics and defense industries. Since April, for certain rare earth materials, Beijing has required export licenses, which disrupt supply chains in global manufacturing.

The latest moves represent a "major upgrade" of Beijing's rare earth export control regime, expanding its reach from raw materials to technology and intellectual property.

"These restrictions will ... deepen foreign dependence on Chinese know-how," the South China Morning Post quoted Wang Dan, the China director at risk consultancy Eurasia Group, as saying.

In addition, the Ministry of Commerce said foreign entities exporting rare earth materials produced in China must now apply for a dual-use item export permit, effective immediately. Rare earth products manufactured overseas but incorporating elements or technologies originating from China will be subject to restrictions, which will come into effect on December 1.

On October 9, a spokesperson for the Ministry of Commerce responded to a reporter's question by saying, "For some time, some overseas organizations and individuals have directly or indirectly transferred controlled rare earth items originating in China ... for use in sensitive fields, such as the military. These actions have caused significant harm to or posed potential threats to China's national security and interests ..."

Official scrutiny becomes more onerous

Exporters must obtain permission for technologies used in rare earth mining and smelting, among other processing steps, the ministry said.

Officials will review applications related to research and development or production of certain types of semiconductors and artificial intelligence technologies with potential military applications on a case-by-case basis.

They are supposed to reject all applications for exporting to overseas military users.

It remains unclear how Beijing intends to enforce the controls on companies operating outside China.

The new announcement may hamstring initiatives by countries seeking to boost their own production or to form partnerships to reduce reliance on Chinese supply chains.

China announced the measures as it resumed business after a weeklong national holiday and just weeks ahead of the Asia-Pacific Economic Cooperation summit in South Korea. The leaders of China and the United States are expected to meet on the sidelines of the summit, where rare earths are likely to feature prominently in discussions.

Chinese patents, foreign dependence

Global rare earth deposits total approximately 110 million tons, including 44 million in China, the US Geological Survey said in 2024.

Brazil holds an estimated 22 million tons, Vietnam 21 million, Russia 10 million and India 7 million.

Beijing has for decades invested heavily in refining operations, without exercising the strict environmental oversight required in the West.

It has filed an extensive number of patents related to rare earth production, hindering foreign rivals. As a result, many firms still send their ore to China for refining.

The restrictions imposed this year disrupted industries worldwide, with some companies forced to suspend production as supplies tightened.

Following a summit in Beijing in July, European Commission President Ursula von der Leyen said leaders had agreed to improve the mechanism governing Chinese exports of rare earths to the European Union. However, European firms still face difficulties obtaining the rare earths, a business lobby said in September.

Australia's strategic gambit

To counter China's dominance in rare earth supply chains, Australia has announced plans to sell stakes in a new 1.2 billion AUD ($791.5 million) Critical Minerals Strategic Reserve to allied nations. Partners such as the United Kingdom, United States and France are invited to co-invest for priority access to critical minerals vital for clean energy, electronics and defense, according to Rare Earth Exchanges.

This strategic reserve marks a major step in securing these vital supply chains.

It aims to stabilize prices, foster upstream growth and move the democracies from fragmented efforts toward coordinated resource security.

Australia was the world's leading lithium producer in 2024 and has the second largest reserves of cobalt and nickel. It offers allies a viable alternative to China's control of 85% of rare earth processing.

Commitments to joint funding and to guaranteed demand could limit their exposure to geopolitical and supply risks.