China Eases Restrictions on Rare Earth Element Exportation

China is alleviating its stringent regulations on the exportation of rare earth elements by sanctioning “a certain number” of export permits, according to a statement from the nation’s commerce ministry. This move could signal the commencement of a period of easier access to rare earths for global supply chains.

While the ministry confirmed the approval of several applications, it remained tight-lipped on the specifics. Details such as whether licenses have been granted to American companies or the exact number of approved applications were not disclosed.

He Yadong, a spokesperson from the commerce ministry, expressed at a news conference that China is committed to bolstering the approval process for compliant applications. The country is also keen on enhancing communication and dialogue with relevant nations regarding export controls, he added.

In early April, China revealed plans to limit its exports of several rare earth elements including dysprosium, gadolinium, scandium, terbium, samarium, yttrium, and lutetium. Commonly referred to as “heavy” and “medium” rare earth elements, these materials are widely used in the automotive sector, particularly in the manufacturing of components for electric vehicles and hybrids, as well as in the defense industry for parts of jets, missiles, and drones.

The fallout of China’s export restrictions sent shockwaves through global supply chains, with the automotive industry bearing the initial brunt. Several major car manufacturing associations raised alarm over production and assembly lines being halted due to a bottleneck in magnet and rare earth supply.

In response to this, last week, the US President Donald Trump announced that China would provide full magnets and “any necessary rare earths” upfront to the United States as part of a deal that is “done” and only requires final approval by the heads of both countries.

The announcement from President Trump on Truth Social came shortly after officials from the US and China disclosed that they had reached a framework agreement that could lead to China lifting its export restrictions on rare earth elements.