[Source/Observer Network Qi Qian] On June 12, a spokesperson for the Ministry of Commerce stated that China has legally approved a certain number of compliant applications for rare earth exports.

Upon the release of this news, American companies that had been lamenting about the "rare earth shortage" breathed a sigh of relief. An article in The Washington Post on June 13 noted that although uncertainty still exists, American businesses welcomed it. However, analysts reminded that China's export permit system for rare earth magnets is permanent, and China will not allow American customers to hoard rare earth materials.

"I will be one of the happiest people if China really begins to release some heavy rare earths and allows them to enter the world economy," said Mark Smith, CEO of American critical mineral developer NioCorp. "Because without these heavy rare earths, the global economy would come to a standstill."

It was introduced that NioCorp is developing a new mine in Nebraska to produce niobium, scandium, titanium, and various rare earth elements.

However, Gabriel Wirtheau, managing director of American consulting firm Teneo, wrote in a report that even so, "supply disruptions will remain an ever-present threat." He believed that China's rare earth magnet export permit system is permanent.

Wirtheau wrote: "China may not approve enough exports to allow American clients to stockpile, thereby ensuring its influence in this field remains unchanged. China may not, or even completely refuse to approve rare earth exports to American defense companies and their suppliers."

Yunnan Rare Earth Mine Visual China

Rare earths are crucial for electric vehicles, nuclear submarines, and other fields. Over the past 30 years, China has maintained dominance in rare earth mining and refining.

According to data from the International Energy Agency, in 2023, China accounted for more than 60% of global rare earth ore production, but its control over the processing stage accounted for 92% of global output, almost monopolizing the processing sector globally. The U.S. Geological Survey also stated that between 2020 and 2023, 70% of America’s rare earth compounds and metal imports came from China.

In April this year, after President Trump imposed excessively high tariffs on China, Beijing swiftly retaliated by implementing export controls on key minerals and rare earth magnets. Industry insiders revealed that China is establishing an export permit system.

Reuters previously reported, citing sources, that with the introduction of export control policies, China has introduced a tracking system for the rare earth magnet industry. Sources familiar with the matter disclosed that China's tracking system has taken effect—requiring producers to submit additional information online, including transaction volume and client names.

As the impact of the regulations becomes apparent, Western companies, including those in the United States, began lamenting about the "rare earth shortage," with some Western media outlets hyping up the so-called "weaponization of rare earths."

Global automakers are concerned about the possibility of production delays and interruptions. Previously, Ford Motor Company in the United States stated that due to a rare earth shortage, production of a model at its Chicago plant was suspended for a week in May. European, Japanese, and Indian car companies and associations also warned that the industry "has suffered serious disruptions," with production interruptions imminent.

The Washington Post mentioned that California-based MP Materials owns the only operational rare earth mine in the United States. Previously, the company transported heavy rare earth elements mined there to China for processing, but was forced to cease operations after Trump initiated the Sino-American tariff war.

Neha Mukherjee, an analyst at U.S. Benchmark Venture Capital specializing in rare earths, previously predicted that most companies would not begin experiencing rare earth shortages until later this year. However, it now appears that some companies are already encountering issues.

Mukherjee said: "There is indeed inventory in the overall market, but many original equipment manufacturers, especially automobile manufacturers, seem unprepared. Although some American companies have stockpiled inventories, if this situation persists, they may start to face constraints." He pointed out: "It seems that most of the inventory is still in China, thus causing bottlenecks in rare earth supply."

Rare earth magnet data photo social media

On the afternoon of June 12, the Ministry of Commerce held a regular press conference. A journalist asked about the situation regarding the first meeting of the China-U.S. economic and trade consultation mechanism.

Spokesperson He Yadong of the Ministry of Commerce introduced that from June 9 to 10 local time, the China-U.S. economic and trade teams held the first meeting of the China-U.S. economic and trade consultation mechanism in London. Both sides reached principled consensus on measures frameworks for implementing important consensus from the leaders' phone call on June 5 and consolidating the results of the Geneva economic and trade talks, and made new progress in addressing each other's economic and trade concerns.

He Yadong said that in the next step, both sides will further play the role of the China-U.S. economic and trade consultation mechanism, continue to maintain communication and dialogue, continuously enhance consensus, reduce misunderstandings, strengthen cooperation, and jointly promote the steady and long-term development of China-U.S. economic and trade relations.

In response to the question about rare earths raised by the reporter, He Yadong stated that as a responsible major country, China fully considers the reasonable needs and concerns of all countries in the private sector, reviews rare earth-related items export permit applications according to law, has already legally approved a certain number of compliant applications, and will continue to strengthen the approval work for compliant applications.

This article is an exclusive piece from Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7515277296798892580/

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