A licence becomes a factory problem
Published 13 October 2026
In its March 28 report Reuters noted that it had reported the previous day that the KIA had told miners in Kachin it would now allow shipments of existing rare earth inventories to China. A rare earths expert told Reuters that to resume operations at full capacity the KIA would need an agreement with China. re049, Reuters, Myanmar rebels disrupt China rare earth trade, sparking regional scramble
On March 28, 2025, Reuters published a report from Bangkok on what had happened to the supply of heavy rare earths from northern Myanmar. When armed rebels seized the country's rare earth mining belt in October 2024, the report said, they dealt a blow to the military junta and "wrested control of a key global resource." The Kachin Independence Army had captured sites that produce roughly half of the world's heavy rare earths. The rebels were seeking leverage against China, which supports the junta and has invested heavily in Kachin mining, according to two people familiar with the matter. Chinese customs data showed imports of rare earth oxides and compounds from Myanmar fell to 311 tonnes in February 2025, down 89% on the year before. Most of the fall came after October. Reuters spoke to nine people with knowledge of the industry. re049, Reuters, Myanmar rebels disrupt China rare earth trade, sparking regional scramble
The next change was a licence. On April 4, 2025, China's Ministry of Commerce and its customs agency published Announcement No. 18. It put seven rare earth elements, and the magnets and compounds made from them, under export licensing: samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium. Nothing was banned. The listed exports needed a licence from the competent commercial authority of the State Council. re060, MOFCOM, Announcement No. 18 of 2025
France also sought more processing capacity. On April 8, 2025, Solvay launched an expansion at its La Rochelle plant, days after China implemented export restrictions on certain rare earth elements. Reuters said the plant "was one of the largest in the world" four decades earlier, but "production spiralled lower over the years as China ramped up cheaper output to now account for about 90% of the world's processed rare earths." Chief executive Philippe Kehren said what was happening was "an incentive to develop those regional value chains," then added a condition: "if we want to invest further, we will need some comfort from the customers." Solvay had so far invested several million euros and was waiting for orders from customers such as carmakers before committing about 100 million euros to a full-scale expansion. It would focus on neodymium and praseodymium, aimed for eventual output of 2,000 to 5,000 tonnes of rare earth oxides, and did not plan to go further down the chain into metals, alloys or magnets. The company said it eventually aimed to supply 30 percent of Europe's processed rare earths demand for magnets by 2030, "but it depends on demand from customers." Reuters wrote that the EU's Critical Raw Materials Act set 2030 targets of 10 percent of annual needs mined, 25 percent recycled and 40 percent processed domestically. re056, Reuters, Solvay launches rare earth processing expansion amid China restrictions
On May 9, 2025, the Alliance for Automotive Innovation and the parts-supplier group MEMA sent a letter to Trump administration officials. The letter had not been reported before. Reuters published the story about it on May 30, three weeks later. The letter listed what would stop if magnets from China stopped: "automatic transmissions, throttle bodies, alternators, various motors, sensors, seat belts, speakers, lights, motors, power steering, and cameras." Then the line that carried the weight: "In severe cases, this could include the need for reduced production volumes or even a shutdown of vehicle assembly lines." re059, Reuters, Automakers warn of magnet shortages
The letter came from the trade group representing General Motors, Toyota, Volkswagen, Hyundai and other major automakers. When trade groups with that membership write to a government in those words, they are warning of factory disruption. re059, Reuters, Automakers warn of magnet shortages
On May 12, 2025, the two governments published a joint statement on a meeting in Geneva. In the joint text, the United States agreed to suspend 24 percentage points of the additional duty on Chinese goods set by Executive Order 14257 of April 2, 2025 for an initial 90 days, keeping 10 percent, and to remove the modified rates imposed by two later orders. China agreed to make the matching change to its tariffs on U.S. goods and to "adopt all necessary administrative measures to suspend or remove the non-tariff countermeasures taken against the United States since April 2, 2025." The statement also set up a mechanism for continued talks, with Vice Premier He Lifeng for China. re074, White House, Joint Statement on U.S.-China Economic and Trade Meeting in Geneva re075, CNBC, China keeps rare earth exports control for United States
The statement does not mention rare earths by name, though CNBC reported that China agreed to suspend or remove non-tariff countermeasures taken since April 2, 2025. CNBC wrote that, after Geneva, China paused export restrictions on 28 American companies for 90 days, and took 17 companies off its "unreliable entity list," 11 of them for 90 days, but was "continuing to block exports from that country of seven rare earth metals to the United States." Asked about the rare earths controls at a regular press conference on the Thursday, a Ministry of Commerce spokesperson, per the report, did not have any information to provide, and the outlet wrote that "it is unclear why the rare earths controls were not included" in the easing of other non-tariff countermeasures. On the same day China removed 28 American companies from its export control list, it said, the Ministry issued a statement on a clampdown on rare earth smuggling that said "All departments agree that comprehensive control of strategic minerals is essential." re074, White House, Joint Statement on U.S.-China Economic and Trade Meeting in Geneva re075, CNBC, China keeps rare earth exports control for United States
In May 2025 Lynas announced a milestone in Malaysia, not in its planned Texas facility. On May 16, 2025, Mining Weekly reported that Lynas had achieved first production of dysprosium oxide at its Malaysian plant, "making it the only commercial producer of separated heavy rare earths outside China." The circuit began commissioning in the March quarter, with first terbium oxide expected in June. Chief executive Amanda Lacaze called it "a significant step for supply chain resilience" that gave customers the option of sourcing from outside China. "Lynas is now the world's only commercial producer of separated heavy rare earth products outside China," she said, adding that the company was engaged with customers in Japan, the United States and Europe, and the company said prices for the new heavy products "are expected to reflect strong demand in non-Chinese markets." The timing sets a point of comparison. The Texas plant, which received public money in 2022 and 2023 and was targeted for the 2026 financial year, is a plan in the documents cited here, while the Malaysian dysprosium is a reported production result. The sources for this chapter do not say whether the Texas facility has started operating. re053, Mining Weekly, Lynas begins first heavy rare earth output outside China re052, Reuters, Lynas Rare Earths signs updated contract with US government for Texas facility, shares rise re051, Department of Defense, DoD Awards Key Contract for Domestic Heavy Rare Earth Separation Capability
Suzuki reported a stoppage in Japan. It halted production of its Swift subcompact (excluding the Swift Sport) from May 26, citing a shortage of components. Two people familiar with the matter told Reuters the cause was China's restrictions. Suzuki pushed back its restart several times and said a partial restart was expected June 13, with full resumption after June 16, as "prospect of parts supply is clearer." The company declined to comment on the reason. re067, Reuters, Suzuki Motor halted Swift production due to China's rare earth curbs, sources say
Reuters reported on May 30, 2025 that US Trade Representative Jamieson Greer told CNBC that China had agreed to lift restrictions on the exports of rare-earth magnets to U.S. companies but "was not moving fast enough to grant access for key U.S. industries." re059, Reuters, Automakers warn of magnet shortages
European parts makers also reported stoppages. On June 4, 2025, Reuters reported that some European auto parts plants had suspended output, that Mercedes-Benz was considering ways to protect against shortages, and that the supplier association CLEPA had warned of further outages. BMW said part of its supplier network was disrupted but its own plants were running as normal. Ford's finance chief, Sherry House, said of China's export controls: "It continues to be an issue, and we continue to work the issues." re066, Reuters, Some European auto supplier plants shut down after China's rare earth curbs
By then the trade diplomacy had started. President Trump said on the Friday before that Xi Jinping had agreed to let rare earths minerals and magnets flow to the United States. A U.S. trade team was scheduled to meet Chinese counterparts for talks in London on Monday. The controls came on April 4. The first factory stoppages came in late May. Reuters wrote that exasperated automakers and parts suppliers were desperate to find alternative sources of magnets, which were in short supply due to Chinese export curbs. re068, Reuters, Auto companies 'in full panic' over rare-earths bottleneck re060, MOFCOM, Announcement No. 18 of 2025 re067, Reuters, Suzuki Motor halted Swift production due to China's rare earth curbs, sources say
On June 9, Reuters reported from Berlin, London and Detroit on the scramble for non-Chinese magnets. Frank Eckard, chief executive of the German magnet maker Magnosphere, in Troisdorf, said he had been fielding "a flood of calls." Some customers told him their factories could be idled by mid-July. "The whole car industry is in full panic," he said. "They are willing to pay any price." The article put the episode in context: a semiconductor shortage had wiped millions of cars from automakers' production plans from roughly 2021 to 2023, and before that the coronavirus pandemic in 2020 shut factories for weeks. Rare earths risked being the third big supply shock in five years. re068, Reuters, Auto companies 'in full panic' over rare-earths bottleneck
India is an interesting case because it does both things. It holds rare earths, and it buys magnets. On June 13, 2025, Reuters reported that India had asked its state-run miner IREL to suspend a 13-year-old agreement on rare earth exports to Japan and to safeguard supplies for domestic needs, citing two sources familiar with the matter. The report said Commerce Minister Piyush Goyal had asked IREL, in a meeting with auto and other industry executives, to stop exporting rare earths, mainly neodymium. India has the world's fifth-largest reserves, the report said, and IREL wanted to develop India's capacity for rare earth processing and was looking for a corporate partner for magnets for the auto and pharmaceutical industries. India responded to Chinese controls by moving to keep its own rare earths at home. re104, Reuters, EXCLUSIVE: India moves to conserve its rare earths, seeks halt to Japan exports, sources say
The first licences were only starting to trickle out. China's commerce ministry said on the Thursday that "a certain number" of rare earth export licence applications had been approved, without disclosing details. Two Chinese magnet makers, JL Mag Rare-Earth and Innuovo Technology, announced in recent weeks that they had secured a few export licences for some clients. re064, Reuters, China's rare earth magnet shipments halve in May due to export curbs
China's General Administration of Customs reported that the country shipped 1,238 metric tonnes of rare earth permanent magnets in May 2025. That was 52.9% below April, which had itself halved from March. It was the lowest single month since February 2020, and 74% below May 2024. Reuters reported the figure on June 20, 2025. Industry sources told the reporters that customs officials had become cautious about all rare earth cargoes, because magnets travel under a single customs code despite a variety of chemistries. Dysprosium is among the seven medium-to-heavy rare earth items listed under the controls. Sources said customs were also holding up some lower-performance rare earth magnets used in appliances and consumer electronics. The reason the sources gave was confusion over how to apply Beijing's export curbs. re064, Reuters, China's rare earth magnet shipments halve in May due to export curbs re060, MOFCOM, Announcement No. 18 of 2025
On July 8, 2025, Reuters reported that nearly half the world's supply of heavy rare earths is extracted from mines in Kachin state and shipped to China for processing. China, the report said, had threatened to halt buying the minerals mined in KIA-controlled territory unless the militia stopped trying to seize full control of Bhamo, a garrison town less than 100 kilometres from the Chinese border, and a KIA official said the Chinese demand was made in May. Three people familiar with the matter described the ultimatum, Reuters said. Reuters could not determine whether China had carried out its threat, and noted that fighting in the region had restricted mining operations and that rare-earth exports from Myanmar had plunged this year. The report's framing: "The global supply of heavy rare earths hinges in part on the outcome of a months-long battle between a rebel army and the Chinese-backed military junta." re048, Reuters, EXCLUSIVE: Why China's ultimatum to Myanmar rebels threatens global supply of heavy rare earths