Stories
China's Critical Mineral Grip Loosens, But Challenges Remain for Global Supply
- •China's Ministry of Commerce issued Notice 61 in October 2025, an aggressive export control measure on rare earth elements, later paused until November 2026.
- •Despite global efforts to diversify, including US MOUs and Europe's first rare earth magnet plant, displacement in rare earth and magnet production remains modest.
- •Major US defense contractors warn they cannot meet the January 2027 deadline to eliminate Chinese-sourced rare earth magnets from military supply chains.
- •India faces acute vulnerability in heavy rare earth elements (HREEs) due to high refining concentration, reserve concentration, and extraction complexity outside China.
- •Strategies to de-risk from China include joint stockpiling, technology substitution (using less HREEs, changing magnet types like ferrite, or redesigning motors), and focusing on alternatives to permanent magnet synchronous motors (PMSM).
Key Questions Answered
On October 9, 2025, China's Ministry of Commerce issued Notice 61, requiring any product manufactured outside China containing Chinese-origin rare earth elements at or above 0.1% of its value to obtain an export license before shipping. Although MOFCOM paused the notice as part of a de-escalation agreement, licensing requirements for seven medium and heavy rare earths introduced in April 2025 remain in effect.
Heavy rare earth elements score at or near the maximum on three vectors simultaneously: refining concentration, reserve concentration, and extraction complexity. The refining process involves complex multi-stage solvent extraction of chemically near-identical elements, leaving Lynas in Malaysia as the only commercially operational heavy rare earth separation facility outside China.
The transition away from heavy rare earths involves three main channels: using less material via grain boundary diffusion to concentrate it in a thin shell around each grain, changing the magnet type to utilize cheap and abundant ferrite or light rare earth alternatives, and changing the motor by adopting wound-field or induction motors instead of permanent magnet synchronous motors.
