FACTBOX: China's export controls weigh on global critical minerals supply

• Beginning in July 2023, China's Ministry of Commerce began implementing export restrictions on "dual-use items," defined as products, technologies or services that can be used for both civilian and military purposes. The controls cover a range of critical minerals and related products, including selected rare earths: scandium, yttrium, samarium, terbium, dysprosium and lutetium.
• Introduced on Dec. 1, 2020, China's Export Control law provides detailed requirements for licensing, customs verification and the management of end users and end uses.
• The policy underscores China's leverage across critical minerals supply chains. Developed economies remain heavily reliant on China for rare earths. The International Energy Agency estimates that in 2024 China accounted for 61% of global mined rare earths supply and 91% of global refining and processing capacity for major rare earths, while it also dominates processing for other critical minerals, including lithium, copper, cobalt and graphite.

Minerals affected

• China has introduced controls on specific critical minerals in multiple tranches. The first wave targeted gallium and germanium in July 2023. This was followed by controls on certain graphite products in October 2023, antimony in August 2024, and five critical minerals — tungsten, tellurium, bismuth, molybdenum and indium — in February 2025.
• In April 2025, responding directly to US "Liberation Day" tariffs covering a broad range of Chinese products, Beijing announced export control on seven rare earth elements — samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium — covering their associated metals, oxides, alloys, compounds, targets and magnet materials.
• In October 2025, China announced additional export controls covering holmium, erbium, thulium, europium and ytterbium, along with their related products, equipment and technologies. Beijing also announced a total ban on exports of gallium, germanium and antimony to the US. Originally slated for Nov. 7, 2025, these measures were eventually suspended until Nov. 10, 2026.

Trade flows

• China's controls have significantly disrupted exports of rare earths and other critical minerals, with US and European buyers reporting delays and additional paperwork. US magnet manufacturer Arnold Magnetics said in January 2026 that the process had become "slow, opaque, and highly discretionary," with many applications sitting for 60-120 days or longer without clear decisions.
• Chinese customs data indicate that exports of yttrium, terbium, scandium and dysprosium to the US effectively halted after April 2025. Shipments to Japan have also collapsed in 2026 amid an ongoing diplomatic dispute between Beijing and Tokyo.

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Affected industries

• Aerospace and defense are among the most exposed sectors due to their use of highly specialized, hard-to-substitute critical minerals in high-performance applications. For example, rare earths support permanent magnets used in guidance systems, radar and satellites, including high-temperature samarium-cobalt magnets. Tungsten supports dense, heat-resistant munitions and components, while molybdenum is used in high-temperature alloys and propulsion systems.
• Semiconductors and electronics face similar risks. Gallium is used in radio frequency technologies and power electronics; germanium supports fiber optics and infrared applications; and indium is used in indium tin oxide coatings for displays and touchscreens. Rare earths are also used in polishing, lasers, sensors and other optical components.
• In automotive supply chains, exposure runs through both batteries and magnet systems. Graphite is a critical anode material in lithium-ion batteries, enabling high energy density, fast charging, long cycle life, and stable performance. Rare earth magnets —comprising terbium and dysprosium — are used in traction motors, steering, braking, pumps and sensors, including high-temperature applications.
• Renewables and grid equipment depend on critical minerals across wind turbines, solar PV, energy storage and power electronics. Rare earth magnets are used widely in wind generators, graphite underpins battery storage, and indium and tellurium are important for solar technologies, while gallium supports more efficient power-conversion equipment.
• Industrial equipment is exposed mainly through second-order dependencies. Permanent magnets are used in motors, servo systems and automation, while tungsten is critical for cemented-carbide tools and molybdenum supports heat- and corrosion-resistant alloys.

The Western Response

• The US and other countries are responding by diversifying supply sources, investing in domestic production and enabling infrastructure. Measures include supporting new mining projects, advancing technologies to recover critical minerals from spent batteries and consumer electronics, and expanding strategic stockpiles.
• US efforts emphasize direct government funding, public-private partnerships and offtake agreements to reduce dependence on Chinese supply chains. The government is investing nearly $3 billion in domestic critical minerals projects and leveraging international partnerships to strengthen supply resilience for the energy, defense and advanced technology sectors. US agencies are also using equity and equity-linked instruments — including minority equity investments, long-term offtake commitments and strategic reserve initiatives — to catalyze private-sector participation and enhance supply chain resilience.
• The EU is directing funding through the European Investment Bank toward mining, processing and recycling projects while building partnerships with resource-rich countries. It has established 15 critical minerals partnerships with key mineral-producing countries, including South Africa, Namibia, Argentina, Chile and Canada. Under the EU Critical Raw Materials Act — which seeks to secure the bloc's critical raw materials supply chains by establishing benchmarks for extraction, processing and recycling — the EU has identified 60 strategic projects and plans to mobilize up to €3 billion to support accelerated permitting and capital raising.

Prices

• North American rare earth oxide prices have risen significantly in recent months as China's tight export controls on medium- and heavy-rare earths remained in place. Platts assessed dysprosium oxide CIF North America at $2,300/kg on Aug. 31, stable month over month but up sharply from the launch price of $1,200/kg published on March 31.
• Platts CIF North America prices for samarium have demonstrated similar gains since launch, rising to $800/kg on Aug. 31, up from $175/kg on March 31. In contrast, the Platts terbium oxide CIF North America price was assessed at $4,900/kg on Aug. 31, unchanged from the March 31 launch assessment.
• Meanwhile, prices for neodymium-praseodymium oxide, which is not included under China's export controls, have declined steadily since the March 31 launch. Platts CIF North America neodymium-praseodymium was assessed at 110/kg on Aug. 31, down $5/kg on the month and below the March 31 launch price of $125/kg.
• Launched on June 30, Platts dysprosium and terbium oxide prices in China have traded close to parity with US prices. Platts dysprosium oxide FOB China was assessed at $230/kg on Aug. 31, up from the launch price of $220/kg, while terbium oxide FOB China was assessed at $1,005/kg on Aug. 31, up from a launch price of $1,000/kg.