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China Grants U.S. Export Licenses as Washington Ramps Up Rare Earth Production

Providing relief for automakers, Beijing’s approval of select rare earth export applications leaves defense-critical elements tightly controlled with domestic alternatives years away.

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Overview

  • China’s Commerce Ministry has approved some U.S. applications for medium and heavy rare earth exports and indicated Washington will roll back certain trade curbs.
  • Eased licensing has eased supply strains for American automakers, but elements like dysprosium and terbium remain bottlenecked under China’s strict export controls.
  • China still controls more than 99% of the global supply of separated dysprosium and terbium and about 85% of rare earth processing capacity, giving it decisive leverage.
  • The U.S. government has introduced new legislation, streamlined regulations and awarded MP Materials a $58.5 million tax credit to build the country’s first fully integrated rare earth magnet facility.
  • Analysts caution that despite recent gains, achieving a self-reliant U.S. rare earth supply chain will take years due to technical, regulatory and financial hurdles.