China tightening its grip on leaky rare earth supplies – Asia Times

China has implemented a number of new regulations to make it easier for sanctioned American companies to get the country’s precious metal.

The State Council lately unveiled a set of new rules, set to take effect on October 1, to control the country’s unique world economy. No business or individual is permitted to use or steal unusual world deposits because they belong to the state under the new regulations. &nbsp,

According to the rules, the Ministry of Industry and Information Technology ( MIIT ) and the relevant State Council departments will plan and coordinate the implementation of the local law-enforced plan for the rare earth industry development.

The regulations also say that a company may be fined 5-10 times of any profit it made from illegal activities in rare earth mine, smelting and separation, product distribution, as well as immoral imports and exports. If it has not yet made any revenue, it will face a fine between 500, 000 to 2 million yuan ( US$ 68, 751 to$ 275, 005 ).

If a business does n’t send the administrative details of its uncommon world businesses to the country’s solution tracking system, it will be fined 50, 000 to 200, 000 yuan. If it still refuses to publish its data, it will be shut down and fined 200, 000 to 1 million renminbi.

The State Council met on April 26 this year to approve a review of the new laws, and Premier Li Qiang signed them into effect on June 22. On June 29, the authorities made the new regulations publically.

In a remark posted on a social media site called” Shumiyuan No. 1,” a journalist wrote that” the importance of rare earths to China is comparable to that of crude oil to the Middle East. 10″ operated by the state-owned Global Times. ” China may have a say in its unique earth tools, which are essential to the development of the world’s proper emerging business”.

The writer cited US sanctions and export controls against Chinese technology firms as evidence that the implementation of the new regulations will deepen supply-side reform and ensure the safety and stability of the strategic resource industry chain supply chain, giving China the opportunity to bargain in the unfair international high-tech competition. &nbsp,

He wrote the new regulations to help China combat the smuggling and illegal mining of rare earths, strengthen its rare earth industry, and prevent foreign intelligence agencies from obtaining its technology.

In February 2022, the Chinese Ministry of Commerce accused Lockheed Martin, the maker of America’s F-35 fighter jets, and Raytheon Technologies Corp, the world’s largest producer of guided missiles, of selling arms to Taiwan and banned them from buying China’s rare earths. &nbsp,

A man allegedly bribing the manager of a Chinese rare earth company for information relating to the country’s rare earth reserves was sentenced to 11 years in prison on April 14th according to China Central TV’s report from the same day. &nbsp,

Chinese media reported last month that some sanctioned foreign defense contractors had bribed Chinese business executives into paying them to export a sizable amount of rare earths. Additionally, they claimed that some Western spies had attempted to elude China’s advanced technology for rare earth processing. &nbsp,

They claimed the Ministry of State Security had provided them with information about the situation without naming any businesses, but that they were merely referring to US companies like Lockheed Martin.

The US has made more efforts in recent years to diversify its imports of rare earth from China to countries like Australia and Brazil.

Recent developments in the industry include the discovery of an estimated 2.34 billion metric ton deposit in Wyoming, the state of Wyoming, and an estimated 8.8 million metric tons of rare earths in Norway last month. &nbsp,

The Biden administration has stated that it wants to establish a new domestic rare earth supply chain. The Internal Revenue Service granted the California-based MP Materials a$ 58 million tax credit on April 1 to help fund the construction of America’s first fully integrated rare earth magnet factory. &nbsp,

A postgraduate student using the pseudonym” Nick Wilde” claimed in an article published by Taiwan’s Liberal Times on Monday that” the proportion of China’s rare earth production to the world’s total output has decreased to about 70 % now from 90 % a decade ago. &nbsp,

The writer claims that if China’s Communist Party reduces its exports of rare earth, it will only have a limited impact on the West. ” But at the same time, China will face more Western sanctions”.

In light of the industry’s slowdown, China may refrain from starting a rare earth battle, according to other analysts.

China Rare Earth Resources and Technology, the state conglomerate China Rare Earth Group’s Shenzhen-listed subsidiary, reported on Monday that it made a net loss of about 231 million to 251 million yuan in the six months ended June 30 as compared to a net profit of 172 million yuan a year earlier.

The business claimed that over the past year, rare earth prices have significantly decreased.

Read: China wants role in US-Vietnam rare earths plan

Follow Jeff Pao on X at&nbsp, @jeffpao3