In October 2025, China’s Ministry of Commerce (MOFCOM) widened its rare earth rules. It added five elements (holmium, erbium, thulium, europium and ytterbium) and brought in controls on related technology. It also introduced an extraterritorial rule that reached products made outside China if they contained even 0.1% Chinese-origin rare earth content.
On 7 November 2025, after US-China talks, MOFCOM suspended that package under Announcement No. 70. The suspension runs until 10 November 2026.
Two details matter. First, this is a licensing system, not a ban. Exporters need a Chinese government licence, and each application is decided case by case. Second, the suspension covers only the October 2025 package. It does not cover everything.
The controls China introduced on 4 April 2025 were never suspended. They cover seven medium and heavy rare earth elements, including dysprosium, terbium and yttrium, along with related magnets. Exporters still need licences for them today.
So even a full extension of the pause leaves a licence regime in place. For buyers, the practical question is not “ban or no ban”. It is “how fast and how reliably do the licences arrive”.
Not much that is clear. On 28 September 2026, MOFCOM said China and the US had agreed to extend their wider trade arrangement to 10 January 2027. The statement did not name rare earths, and it did not amend the suspension notice. The published legal text still ends on 10 November.
Analysts describe three outcomes: extend the pause, bring back controls on selected elements or end uses, or restore the full October 2025 package. In May, the White House said China would address US concerns about yttrium, scandium, neodymium and indium. Analysts noted that the statement said nothing about the pause itself.
Treat an extension as possible, not promised.
China accounts for about 91% of global rare earth separation and refining. In a 2025 International Energy Agency assessment it was the leading refiner for 19 of 20 strategic minerals. The IEA also estimated that full implementation of China’s controls could put about $6.5 trillion a year of downstream production outside China at risk.
Mining is not the bottleneck. Processing is. Ore can be dug in many countries, but turning it into separated oxides and sintered magnets takes years of capital and know-how, and most of that sits in China. Analysts describe diversification as gradual and capital-intensive, and expect China to keep its lead in processing and magnet making through this decade.
The calm has been conditional. In June 2026, China tightened its curbs on 10 US companies, which in effect meant a full ban on dual-use exports to the listed firms. In July, it banned rare earth exports to 14 European companies.
Prices of related minor metals show the nerves. Germanium traded at 28,500 yuan a kilo on 23 October, up from 20,500 on 1 June. Gallium moved the other way, easing from 2,150 to 1,740 yuan a kilo over the same period. The stories differ, but both metals depend on the same policy lever.
| Scenario | What happens | What a buyer should expect |
|---|---|---|
| Extension | MOFCOM extends the pause, possibly alongside the wider US-China arrangement to 10 January 2027. | Licences keep flowing at roughly today’s pace. Prices stay jumpy but the cliff moves, so use the time to build a second source. |
| Selective return | Controls come back for chosen elements or end uses, such as defence or advanced chips. | Most industrial buyers are spared at first, but licence checks get stricter and end-use paperwork grows. |
| Full return | The October 2025 package, including the 0.1% rule for foreign-made goods, applies again. | Longer lead times, higher prices outside China and a scramble for stock. This is the case to plan against. |
Plan against the third row and hope for the first. A plan built for the worst case costs little if the best case arrives. A plan built for the best case costs a great deal if it does not.
Rare earths are not copper, but the two move together through the same factories. Motors, generators and transformers use magnets, copper winding wire and aluminium housings. A pause in one input slows orders for the others. LME copper stood near $14,400 a tonne in late October, close to its record, and any disruption to motor output would hit demand for winding wire just as supply is already tight.
That is why a procurement team that watches only the copper screen can be surprised. Add a line to your weekly review for rare earth licence news, and treat it the way you treat a US tariff headline.
Neodymium-iron-boron magnets sit inside EV traction motors, wind turbine generators, industrial servo drives, robots and consumer electronics. If the magnets stall, those machines stall.
For a copper wire maker the link is indirect but real. Enamelled winding wire goes into the same motors, coils and transformers. When magnet supply stutters, motor makers slow down, and orders for winding wire slow with them. A rare earth shock therefore travels down the chain and lands on copper demand.
Indian manufacturers face a second risk, which is price. Heavy rare earth prices outside China have run well above Chinese domestic levels. If licences slow, that gap can widen, and it would be paid by buyers outside China.
In June, G7 members agreed to cut reliance on any single supplier of rare earths and permanent magnets to below 60% by 2030. In the US Congress, four bills target mine permits, a $2.5 billion reserve and defence supply chains, and they still have to pass the Senate.
Projects outside China are ramping up. But their timelines run to years, not weeks, and none of them changes what happens on 10 November.
Chanakya’s mandala doctrine offers a useful rule here. The ruler next door is a likely rival, and the ruler beyond him a likely friend. Apply that to sourcing: a second supplier on the far side of your main one is worth more than another supplier next door.
SMARTE tracks critical minerals because they shape demand for the copper and aluminium products that go into motors, coils and power equipment. Our Knowledge Hub will update this guide as soon as MOFCOM publishes its decision.
No. China runs a licensing system. Exporters need a government licence for listed items and each application is decided case by case. Some named companies have been banned outright.
The published suspension notice ends on 10 November 2026. Unless China extends, replaces or modifies it, the October 2025 rules come back.
Seven medium and heavy elements have needed licences since 4 April 2025. The five elements added in October 2025 are suspended until 10 November.
Through the supply of magnets and motors, which affects EVs, wind power and electronics, and through longer lead times and higher prices outside China.
The 10 November date is not an automatic embargo. It is a cliff edge with several possible landings, and the licence regime from April 2025 already limits how smooth any of them will be.
The manufacturers who come through best will be the ones who mapped their exposure early, held sensible stock and found a second source. Start with step one today. If you want a short briefing for your procurement team, request a callback from SMARTE’s export desk.
Comments are closed