Rare Earth Regulations to Further Protect Domestic Supplies

BEIJING: China has unveiled a list of rare earth metals regulations aimed at protecting supplies in the name of national security, outlining rules for mining, smelting and trading critical materials used to make products ranging from magnets in electric vehicles (EVs) to consumer electronics.

Regulations issued by the State Council or Cabinet state that rare earth resources belong to the state and that the government will oversee the development of the industry around rare earth elements – a group of 17 minerals of which China has become the world’s dominant producer in recent years, accounting for close to 90% of global refined production.

Their global industrial importance is so great that, under the law that entered into force in May, the European Union (EU) set ambitious goals for 2030 for the domestic production of minerals key to the green transformation – especially rare earth elements due to their use in permanent magnets driving motors in electric vehicles and wind energy.

EU demand is forecast to increase six-fold in the decade to 2030 and seven-fold by 2050.

China’s new regulations, which will take effect on October 1, stipulate that the State Council will establish an information system to track products containing rare earth elements.

Enterprises engaged in the mining, smelting and separation of rare earth elements and the export of rare earth products will establish a product flow registration system, record the flow “reliably” and enter it into the traceability system, the State Council said.

China last year imposed restrictions on exports of germanium and gallium, commonly used in the chip sector, citing the need to protect national security and national interests.

It also banned the export of rare earth magnet manufacturing technology and imposed a ban on rare earth extraction and separation technology.

The regulations have fueled fears that restrictions on the supply of rare earth elements could increase tensions with the West, which accuses China of using economic coercion to influence other countries. — Reuters