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Supply Bottlenecks Persist After US-China Rare Earths Deal as India Seeks Australian Supplies

Licensing delays since the June 27 US-China framework are fueling rare earth stockpiles as India pursues supplies in Australia to reduce its dependence on Beijing’s controls.

Workers transport soil containing rare earth elements for export at a port in Lianyungang, Jiangsu province, China October 31, 2010. Picture taken October 31, 2010. REUTERS/Stringer/File Photo
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Overview

  • Chinese export licensing remains slow months after the June 27 US-China framework, leaving rare earth inventories stacking up at state-backed exchanges.
  • Beijing’s 2006 production quota system, magnet tracking requirements and technology export bans remain fully enforced, preserving its strategic leverage over critical mineral flows.
  • Automakers and magnet makers suffered production pauses and a 75% drop in exports in April and May, and expect continued uncertainty over license approvals.
  • India has stepped up negotiations with Australia to secure early-stage rare earth blocks and copper assets, aiming to diversify its supply chain.
  • Global projects in Australia, the US, Greenland and Brazil are racing to expand rare earth extraction and processing outside China to bolster long-term mineral security.