Rheinmetall downplays impact of China's rare earth export curbs

German automotive and defense manufacturer Rheinmetall AG said it is confident its materials procurement approach will cushion the impact of China's latest rare earth and dual-use export restrictions, adding that they are unlikely to significantly affect group operations.

The comments follow China's decision to add 14 EU entities, including Rheinmetall, to an export control list. Chinese exporters are barred from supplying the listed firms with dual-use items unless they obtain special authorization.

China defines dual-use items as products, technologies, or services that can be used for both military and civilian purposes. Alongside rare earths—including scandium, yttrium, samarium, terbium, dysprosium, and lutetium—the designation also covers gallium, germanium, graphite, antimony, tungsten, tellurium, bismuth, indium, molybdenum, and related products.

China's Ministry of Commerce said the measure is intended to safeguard national security and interests and to fulfill international non-proliferation obligations.

In an emailed statement to Platts, part of S&P Global Energy, a Rheinmetall spokesperson said the restrictions would have only a minor impact on the company. "Our strategy regarding China is paying off, as we took the appropriate measures at an early stage: we have consistently diversified our procurement, established new supply chains, and significantly increased our stock levels," the company said. Rheinmetall also noted that it had "initiated the early redesign of products" where necessary to reduce reliance on critical materials.

"Consequently, the restrictions are having only a minor impact on Rheinmetall. Through stock management and alternative sources, we can minimise or even eliminate any effects. We do not foresee any negative impact on turnover or profit," it added.

The company's stance contrasts with broader market concerns that export controls could expose vulnerabilities in parts of Europe's defense-industrial base, particularly where specialized inputs remain concentrated in Chinese supply chains. In December 2025, the EU announced a multi-billion-euro plan to reduce the bloc's reliance on China for rare earths, warning that Beijing's tightening export controls pose a growing threat to Europe's industrial base.

The latest restrictions underscore China's dominant position in critical minerals supply chains. Developed economies remain heavily dependent on China for rare earths. The International Energy Agency estimates that in 2024, China accounted for 61% of global mined supply and 91% of global refining and processing capacity for major rare earths. China also dominates the processing of other critical minerals, including lithium, copper, cobalt, and graphite.

Platts assessed dysprosium oxide at $2,100/kg CIF North America on June 30, unchanged month over month. Platts assessed terbium oxide at $4,800/kg CIF North America in June, up from $4,700/kg in May.