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China To Speed Up Rare Earth Metals Application Approvals! Supply Chain Curbs A Leverage In Tarde-War?

The decision could be directed towards US and their Tariffs,  automotive industries around the world have been witnessing the brunt of the issue- Further Details Below-

The ongoing scarcity of Rare Earth Metals have been impacting the auto manufacturing units all over the globe. Amid the ingoing tussle between nations to persuade China to ease the supply, China has recently announced that it would accelerate the approval of rare earth exports. A report from Reuters, has revealed that price commitments consultations between China and EU on Chinese made vehicles exported to EU have reached its final stages. 

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The issue has been discussed at length between Chinese commerce Minister Wang Wentao  and EU trade Commissioner Marcos Sefcovic in Paris on Tuesday.  Such comments indicate the progress in the matters that have impacted China’s relationship with Eu over the past year. 

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Most recently, China’s decision in April to suspend exports of a wide range of rare earths and related magnets have caused a issue for automakers allover Europe.

China’s decision to suspend the exports of a wide range of rare earth minerals and related magnets has caused major hindrances for automakers and also affected the global supply chains of necessary components for EV battery production. EV production is not the only dynamic that has reported  such issues aerospace manufacturers, Semiconductor companies and Military contractors around the world have been witnessing similar issues as well.

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China’s dominance of the critical mineral industry, a key to green energy transition, has been serving as a out as a key leverage in its response towards the trade war initiated by US President Donald Trump. According to a Reuters Report, China has a key majority in supplying key earth minerals and China produces about 90% of the World’s Rare Earth Minerals. While the decision could be directed towards US and their Tariffs,  automotive industries around the world have been witnessing the brunt of the issue.  Manufacturers such as Mercedes Benz are actively working towards the creation of a buffer stock of such materials to  protect themselves against such issues. 

List of Critical Earth Minerals

The Critical materials whose supplies have been halted includes materials like, Samarium, Gadolinium, Terbium, Dysprosium, Lutetium, Scandium, and Yttrium. An earlier report from Reuters had also indicated that Industry executives from India, Japan and Europe are urgently seeking to meet and hold a discourse with Chinese officials to expedite stalled export licenses. A Japanese business delegation is expected in Bejing in June.

A resolute solution for such issues Ministry of heavy industries is preparing a stakeholder meeting to discuss the formation of a Domestic rare Earth Magnet Industry. Proposals under consideration as a per an economic times report have been Public-Private partnerships and Production Linked Incentives. This is not the first time that China has used such tactics, in 2010 China had briefly cut off exports to Japan During a territorial dispute. Since Japan had already witnessed such situations over the year’s it diversified its sources and invested in supply sources and refining factories aboard.

Also Read: From Venue Facelift To All-New Bayon: Every Hyundai Vehicle To Launch Soon!

First published on: Jun 08, 2025 01:32 PM IST


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