A trio of top Chinese rare earth magnet producers are now permitted to make multiple shipments to the U.S. and abroad thanks to newly obtained “general” licenses. The news follows China agreeing to significantly ease its export controls on rare earth elements in October in response to positive talks with American officials.
Beijing’s decision to approve the licenses demonstrates that it is following through with the terms agreed upon during discussions at the leaders’ summit in Busan, South Korea,
This week, Reuters procured information from an anonymous source about the streamlined authorizations. JL Mag Rare-Earth Co Ltd (OTCMKTS: JMREY) (FRA: 3KLA), Beijing Zhong Ke San Huan Hi-Tech Co Ltd (SHE: 000970) and Ningbo Yunsheng Co Ltd (SHA: 600366) are the companies that have received them.
Prior to this milestone, all Chinese companies were required to acquire individual permits for every single shipment they made leaving the country. This created processing delays ranging between one to one and a half months per shipment. Now, the three select producers will be able to send multiple bundles of neodymium, praseodymium and heavy rare earths to select foreign buyers within a one-year timeframe.
Rare earth exports from China, a dominant supplier and processor in the industry, have slowed immensely since strict export controls were implemented in response to U.S. tariffs in April.
These approvals should help alleviate stress on the automotive supply chain significantly. Earlier this year, multiple major automotive companies said they were in dire straits trying to procure components for their electric vehicle motors. Many have even had to shut down their production lines for the time being.
The source also explained that only large rare earth companies in China are currently eligible to receive one of these licenses but the criteria could potentially widen later.
The news comes as European officials have been complaining about the slow process of the Chinese letting rare earths to flow out of the country once again. Nonetheless, the European Union Chamber of Commerce in China has said that the new government licenses will provide drastically needed “stability and predictability” for customers that need the materials.
Despite China’s decision to use its rare earths supremacy for political leverage this year, the quantity entering the United States has been rising. Imports being received by the Americans hit a 9-month high in October at 656 tons despite falling by 5.2 per cent globally.
China shipped 5,473 metric tons of the commodities throughout the world that month. Aside from the U.S., Germany, South Korea, India and Vietnam are among Beijing’s top customers.
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