As of 2022, China was responsible for 70% of the global mine production of rare earths.
China recently announced a ban on the export of technology used to make rare earth magnets. This ban extends to the technology for extracting and separating rare earths, a group of 17 metals essential for manufacturing magnets in electric vehicles, wind turbines, and electronics.
In December, China’s commerce ministry proposed the addition of technologies related to samarium-cobalt magnets, neodymium-iron-boron magnets, and cerium magnets to its “Catalogue of Technologies Prohibited and Restricted from Export.” This catalogue, which also includes a ban on technology for rare-earth calcium oxyborate and production technology for rare earth metals, aims to protect national security and public interest.
China has been tightening export regulations for various strategic metals, including the introduction of export permits for chipmaking materials like gallium and germanium, as well as for several types of graphite.
The decision to safeguard its rare earth technologies comes as Europe and the United States are trying to reduce their dependence on Chinese rare earths, which represent nearly 90% of the global refined output. China has perfected the solvent extraction process for refining these minerals, a task that Western companies like MP Materials have found challenging due to technical complexities and pollution concerns.
Following China’s announcement, shares of MP Materials, which is gradually increasing rare earth processing in California, surged by over 10%. Ucore Rare Metals also reported completing a facility to test its rare earth processing technology, partially funded by the U.S. Department of Defence. Pat Ryan, CEO of Ucore, emphasised the need for new technologies to circumvent China’s control over these critical areas, leading to a more than 16% increase in Ucore’s stock.
As of 2022, China was responsible for 70% of the global mine production of rare earths. China refines 89% of the world’s neodymium and praseodymium, crucial for electric vehicle magnets. In the first 11 months of 2023, Chinese exports of rare earths rose by 10% to 48,868 metric tons.
China possesses the largest reserves, estimated at 44 million tonnes of rare earth oxide equivalent. China raised its rare earth mining quota to a record 240,000 tonnes in 2023, a 14% increase from the previous year, partly to address issues with illegal mining.
Other significant reserves are in Vietnam, Russia, Brazil, India, Australia, and the United States. Countries like Australia, Canada, the EU, and the U.S. are developing policies to support their critical minerals sectors.
