China’s State Council has reportedly rolled out a new set of regulations aimed at strengthening control over the country’s rare earths resources and securing its local supply chain.
These 17 minerals are key for high-tech applications, including electric vehicle magnets and consumer electronics. China’s new rules assert that rare earth resources are owned by the state, which will strictly supervise the industry.
Enterprises involved in the mining, smelting, separation and export of rare earths are now required to maintain detailed records of product flow and input this data into the traceability system.
China is considered to be a superpower in the rare earths market, with the country accounting for nearly 90 percent of global refined output. Last year, the Asian nation already imposed restrictions on the export of germanium and gallium — both of which are essential to the semiconductor industry — citing national security concerns.
In addition, China has banned the export of technology used to produce and extract rare earth magnets.
This decision has sparked fears of increased tensions with western nations, particularly the US, which has accused China of leveraging its economic power to influence global markets. China, however, denies these allegations.
This initiative is part of the EU’s broader strategy to support green technology — as mentioned, rare earths are vital for the production of magnets used in electric vehicles and other applications like wind turbines.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
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