China Implements New Controls on Rare Earth Mining, Processing

China has introduced new interim measures to enhance government control over the mining, smelting, and processing of rare earth elements, crucial for technologies such as electric vehicles, smartphones, wind turbines, and military equipment. The regulations require companies to obtain government approval, adhere to production quotas, and submit detailed monthly reports on rare earth product flows to a government tracking system, with legal penalties and quota reductions for non-compliance. These measures also impose stricter environmental standards and aim to curb illegal mining, improve resource efficiency, and safeguard national security amid ongoing U.S.-China trade tensions. China dominates the global rare earth market, supplying about 90% of refined materials while mining roughly 70% of global output and holding nearly half of known reserves, making these controls significant for global supply chains. The new rules apply to both domestic production and rare earth materials imported into China for refining, adding uncertainty to export policies despite some willingness to grant export permits for certain elements. This tightening follows previous export licensing restrictions and reflects China's strategy to consolidate the sector under state-backed champions while addressing environmental and strategic priorities.