China is bolstering export controls on the entire supply chain of critical minerals as it seeks to keep its dominant position in the sector.
China’s relevant authorities will track the exports of critical minerals and will strictly prevent illegal exports, the Chinese Commerce Ministry said on Monday.
“Since the export control of strategic minerals has much to do with national security, strengthening the control of the whole export chain is the key,” the ministry’s statement read, as carried by Reuters.
Last week, the commerce ministry announced “a special operation to crack down on the smuggling and illegal export of strategic minerals.”
China aims to fight the smuggling and illegal exports of strategic minerals by targeting evasion methods such as false reporting, concealment, smuggling, and “third country” transshipments, the authorities said.
Earlier this year, China, which dominates the global rare earth and critical minerals supply chain, announced it would curb its exports of dysprosium, gadolinium, scandium, terbium, samarium, yttrium, and lutetium. These so-called “heavy” and “medium” rare earth elements are mostly used in automotive applications, including rotors, motors, and transmission in electric vehicles and hybrids, as well as in the defense industry in parts of jets, missiles, and drones.
Following Beijing’s move, Chinese exporters of these seven rare earth metals will need to apply for licenses to export, while re-export to the United States is banned. China placed 16 U.S. entities – mostly in the defense and aerospace sectors – on an export control list, limiting them from receiving dual-use goods.
Monday’s announcement of stricter controls on exports of critical minerals comes just as China and the United States announced they are backing off from 100%-plus tariffs on each other’s goods.
The U.S. and China agreed to suspend the tariffs for 90 days, except a 10% baseline rate, the countries said in a joint statement at the end of this weekend’s trade talks in Geneva, Switzerland.
By Charles Kennedy for Oilprice.com
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