Context: China expanded its export ban by including technology for manufacturing rare earth magnets, in addition to the existing prohibition on technology for extracting and separating these critical materials.

• It also banned the export of production technology for rare earth metals and alloy materials as well as technology to prepare some rare earth magnets.

• The move comes as Europe and the US scramble to wean themselves off rare earths from China, which accounts for 90% of global refined output.

Possible Reason behind this decision

• China has added these technology to its “Catalogue of Technologies Prohibited and Restricted from Export“. The list aims to restrict exports of certain technologies in order to protect national security and public interest.

• The list also includes a ban on technology for producing rare-earth calcium oxyborate and rare earth metals, in addition to the previous prohibition on the production of rare earth alloy materials

• Earlier in August 2023, it also implemented export permits for chipmaking materials like gallium and germanium and later similar requirements were extended to various types of graphite.

• Such restrictions by China, the world’s top processor of rare earths, raises concerns over supply chain disruptions in the availability of these critical minerals.

What are the rare earth magnets?

• Rare earth magnets are powerful permanent magnets made from alloys of rare earth elements.

• These magnets, particularly neodymium magnets and samarium cobalt magnets, are known for their exceptional strength and magnetic properties.

What are Rare Earths?

• Rare earths consist of 17 metals employed in creating magnets that convert power into motion, essential for applications in electric vehicles, wind turbines, and electronics.

• The 17 Rare Earths are cerium (Ce), dysprosium (Dy), erbium (Er), europium (Eu), gadolinium (Gd), holmium (Ho), lanthanum (La), lutetium (Lu), neodymium (Nd), praseodymium (Pr), promethium (Pm), samarium (Sm), scandium (Sc), terbium (Tb), thulium (Tm), ytterbium (Yb), and yttrium (Y).

How can it Impact India?

Supply Chain Diversification

• India, like many other countries, relies on Chinese rare earth exports. The ban presents an opportunity for India to reassess its dependence and explore diversification strategies.

• India may focus on developing domestic rare earth extraction and processing capabilities or seek partnerships with other nations to secure its supply.

Industrial Impact

• Industries in India relying on rare earth materials may face disruptions initially due to potential supply constraints.

• However, this could prompt investments in domestic production or collaborations with alternative suppliers to mitigate risks.

• The Rare Earth (RE) resources in India are reported to be the fifth largest in the world.

Road Ahead

• China's ban on rare earth technology exports highlights the criticality of diversifying global supply chains and the need for strategic planning by nations, including India, to secure essential resources for their industries and technological advancement.