China develops new licensing system for rare earth exports
China is working on a new licensing system for rare earth exports, which is designed to speed up shipments but does not mean a complete lifting of existing restrictions.
According to insiders, the Chinese Ministry of Commerce has provided some exporters with information on future permits with new rules and documents.
The country is a monopolist in the production of processed rare earth elements and magnets, accounting for more than 90 % of the global market.
Restrictions remain
Although China has signaled its willingness to simplify procedures, insiders warn that most of the restrictions introduced in April are still in place.
The new licences being developed may be valid for one year and allow for increased exports, but access to them will be limited to customers in the defence and other sensitive sectors.
Also, about half of the applications from EU companies (over 2,000) have not yet been approved.
Why it matters
Rare earth elements and magnets are critical in the production of electric vehicles, radars, consumer electronics and defence equipment.
The fact that China controls almost the entire chain gives it a strategic advantage in trade with the US and the EU.
Any delay or lack of transparency in the issuance of licences creates risks for global manufacturers and suppliers.
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