Snapshot of China’s mineral export controls after trade war truce

By Ashitha Shivaprasad, Amy Lv and Lewis Jackson

Snapshot of China’s mineral export controls after trade war truce

BENGALURU/BEIJING, – China on Monday agreed to remove recent non-tariff countermeasures against the U.S. as part of its trade war truce with Washington, raising the prospect that its export restrictions on rare earths could soon be removed or relaxed.

The seven rare earths added to the export control list last month joined over a dozen minerals and related materials already listed, in each case forcing exporters to apply to Beijing for licenses before selling overseas. China has also separately banned exports of gallium, germanium and antimony to the United States.

However, China said on Monday it would remove measures targeting the U.S. and introduced starting April 2, which would leave almost all existing restrictions in place given they were introduced months or even years ago.

While the rare earth restrictions were introduced after that date, they applied broadly and did not explicitly target the U.S., although industry sources say the truce will likely speed up approvals.

In a sign of Beijing’s intent, hours after the trade war deal was announced, the Ministry of Commerce said export controls on strategic minerals were a national security issue and it would strengthen its hold over the export supply chain.

Below is a summary of all Beijing’s mineral export restrictions since 2023:

RARE EARTHS

China placed seven rare earth elements and related material on an export control list in April.

While the announcement coincided with a broader package of retaliation against Washington’s tariffs, the controls apply globally and the government’s press release made no mention of the United States.

China produces around 90% of the world’s rare earths, a group of 17 elements used across the defense, electric vehicle, energy and electronics industries. The U.S. has only one rare earths mine and most of its supply is sent to China for refining.

While common in the Earth’s crust, China has mastered the technically difficult and environmentally-harmful refining process. It produces almost 90% of global refined output.

China has spent years tightening its control over the rare earths sector. In December 2023, Beijing banned the export of technology to make rare earth magnets, adding it to an existing ban on refining technology.

Domestic production is tightly controlled by a system of quotas which are only granted to state-owned miners.

TUNGSTEN, INDIUM, BISMUTH, TELLURIUM AND MOLYBDENUM

China imposed export controls on the five metals used in defence, clean energy and other industries in early February, shortly after U.S. President Donald Trump’s first 10% tariff on Chinese goods took effect.

Licences are now required to export 20 tungsten, tellurium, bismuth, indium and molybdenum-related products. However the curbs stopped short of outright bans and were narrowly targeted in the cases of some metals, like molybdenum.

BATTERY, LITHIUM AND GALLIUM PROCESSING TECHNOLOGY China in January proposed to restrict the export of some technology used to make cutting-edge battery components and process critical minerals lithium and gallium.

The announcement did not say when the proposed changes, which were open for public comment until early February, could come into force.

At least one company has stopped exporting products on the list since the proposal was floated.

ANTIMONY, GALLIUM, GERMANIUM

Last December, Beijing banned the export of the three critical minerals to the U.S. in response to a fresh crackdown on China’s chip sector from Washington.

The outright ban only applies to the U.S., however over the 18-months prior China had steadily introduced export licensing regimes for the three metals.

In the case of antimony, a strategic metal used in flame retardants, solar power equipment and munitions, exports to big buyers like Japan, India and South Korea had barely restarted three months after export licenses were introduced.

China dominates the supply chain for the three metals and mines or refines between half and 90% of global supply of those minerals.

GRHITE

In October 2023, China said it would require export permits for some graphite products to protect national security.

China is the world’s top graphite producer and exporter, and also refines more than 90% of the world’s graphite into a material that is used in virtually all EV batteries.

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