China announced new interim measures on Friday tightening control over rare earth mining and processing, expanding state oversight of materials critical to electric vehicles, smartphones, and defense applications.
- The Ministry of Industry and Information Technology now requires government approval for companies handling rare earths and mandates accurate reporting of production and processing volumes.
- Violators will face legal penalties and potential reductions in quotas, though specific production and export quotas were not disclosed.
- The new rules cover both domestically mined rare earths and materials imported into China for refining.
- China supplies nearly 90% of the world’s refined rare earths, though it mines only 70% of global output, and holds nearly half of known reserves.
- The U.S. sourced 70% of its rare earths from China in 2024, underscoring reliance despite Trump administration efforts to diversify supply.
- Products covered by the new measures include wind turbines, mobile cranes, heavy equipment, railcars, furniture, compressors, pumps, and more.
- The rules also impose stricter environmental standards on rare earths mining and processing activities.
Relevant Companies
- MP - U.S.-based rare earth producer potentially positioned to benefit if U.S. seeks alternatives to Chinese supply.
- TSLA - EV manufacturer reliant on rare earths for motors and batteries, could face supply chain disruptions.
- AAPL - Heavy user of rare earths in iPhones and other devices, making it vulnerable to tightened Chinese export rules.
Editor’s Note: This is a developing story. This article may be updated as more details become available.
