China Gradually Increases Rare Earth Export Licenses Amid Global Supply Concerns

This week, China’s Ministry of Commerce has begun to approve more export licenses for rare earth magnets, though the issuance rate remains gradual. The government continues to adhere to the export licensing framework established two months prior.

Factories in the automotive and various other sectors across Europe, the United States, and Japan are experiencing dwindling supplies of these critical magnets. China dominates the global production of rare earth magnets, accounting for roughly 90 percent of the worldwide output. These magnets are vital components in electric vehicles, drones, robotics, missile systems, and numerous other advanced technologies.

Following an extensive phone call with China’s leader Xi Jinping, the U.S. President acknowledged that rare earths were a complicated topic. However, no specific commitments regarding changes to China’s stringent export licensing policy, which was implemented on April 4, were disclosed.

The two presidents agreed to have their senior officials engage in upcoming discussions to further address the matter.

China’s official statement on the call omitted any reference to rare earth minerals. At a routine press briefing, a spokesperson for China’s foreign ministry declined to comment on the subject, indicating it falls under the jurisdiction of other government agencies. Meanwhile, the Ministry of Commerce reiterated its commitment to issuing export licenses in accordance with the existing regulations.

Representatives from the American and European Chambers of Commerce in China reported a modest increase in export licenses being granted in recent days. Nonetheless, both organizations stressed that the volume remains insufficient to meet demand, as the Ministry of Commerce is still processing a substantial backlog of detailed license applications.

Jens Eskelund, president of the European Union Chamber of Commerce in China, urged a greater flow of exports from China. He highlighted that the ongoing delays and lack of transparency in the licensing process are adversely affecting production lines across Europe and other regions.