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3w ago

Automakers Press China for Magnet Export Permits to Avert Global Production Outages

Industry delegations are seeking emergency meetings in Beijing to clear a licensing backlog after China imposed export curbs on rare earth magnets in April.

Workers transport soil containing rare earth elements for export at a port in Lianyungang, Jiangsu province, China, in 2010.
Image
A labourer works at a site of a rare earth metals mine at Nancheng county, Jiangxi province March 14, 2012. REUTERS/Stringer/File Photo
The flag of China is placed next to the elements of Gallium and Germanium on a periodic table, in this illustration picture taken on July 6, 2023. REUTERS/Florence Lo/Illustration/File Photo

Overview

  • Since April, Chinese authorities have required exporters to obtain licenses and end-use certificates for rare earth magnets, causing approvals to trickle in and shipments to halve.
  • TVS Motor and Bajaj Auto warn that shortages could force electric vehicle production halts or price hikes by June or July, while Maruti Suzuki sees no immediate disruption.
  • Germany’s auto lobby VDA cautions that slow export license approvals and customs delays threaten assembly lines at Volkswagen, Mercedes-Benz and BMW.
  • Industry and diplomatic delegations from Japan, India, Europe and the U.S. Trade Representative’s office are seeking urgent talks with China’s Ministry of Commerce to expedite clearances.
  • Automakers and governments are exploring alternative supply chains and investing in domestic rare earth processing projects in the U.S., India and elsewhere to reduce reliance on Chinese magnets.