China tightens control over rare earth mineral exports with new regulations

China's clamping down even harder on rare earth mineral exports, tightening its grip over these crucial materials essential for advanced technology manufacturing. Starting October 1, 2024, exporters now have to provide more detailed supply chain paperwork, and the government is also taking over more production facilities.

The new regulations mean companies must keep close tabs on rare earth shipments throughout Western supply chains. On top of that, the Chinese Ministry of Commerce has widened its restrictions, now covering antimony, after earlier crackdowns on gallium and germanium—both needed for making semiconductors.

China's control isn't just about regulations, though. State-backed Shenghe Resources now owns 86 percent of Neo Performance Materials' Wuxi refinery. This place produces almost all the world's dysprosium, a rare earth element important for making advanced semiconductors, especially for AI-focused chips.

Meanwhile, Western countries are scrambling to build new supply chains. Solvay is working on upping dysprosium production in France, and Lynas plans to start refining operations in Malaysia by 2025. In the U.S., MP Materials, which runs the only rare earth mine at Mountain Pass, California, got a Defense Department contract to expand its refining setup.

However, setting up these new operations will take a lot of work. Chinese refineries still have the upper hand with better extraction technology while also benefiting from advanced academic programs focused on rare earth engineering. Western universities don't have the same expertise level, leaving a substantial gap.

The White House has admitted that this situation puts the U.S. and its allies in a tough spot, vulnerable to supply chain hiccups. The reliance on Chinese materials touches everything from F-35 fighter jets to wind turbines and electric car motors. And with clean energy demand expected to jump sevenfold by 2040, the pressure will only grow.