China tightens rules to block Pakistan rare earths exports to US

China has announced new measures restricting the export of its rare-earth extraction technologies after learning that Pakistan uses Chinese equipment to produce niche metals for the United States.

The new rules, issued by the Chinese Commerce Ministry, cover rare‑earth production, processing and separation equipment, as well as related raw and auxiliary materials. Overseas rare earths producers need to apply for export licenses from the Chinese government to obtain China’s extraction technologies and separation equipment.

The Commerce Ministry and China Customs also released four related documents extending export controls across strategic materials on the same day. The documents said China will:

• add synthetic diamond powders, single crystals, diamond wire saws and related equipment to the export control list;
• establish licensing systems for rare-earth separation and extraction technologies and equipment;
• ban exports of specific middle and heavy rare-earth metals, alloys, oxides and compounds;
• restrict exports of lithium-battery components and artificial graphite materials.

Exporters must identify dual-use items and provide detailed technical parameters if products approach control thresholds, according to the documents. The unified measures will take effect on November 8, just two days before the November 10 expiration date of the current trade truce between the US and China.

Beijing’s latest move follows a memorandum of understanding signed on September 8 between the Pakistani government and US Strategic Metals to produce critical minerals in Pakistan. It also precedes a potential meeting between President Xi Jinping and US President Donald Trump during the APEC summit in South Korea later this month.

‘Iron brotherhood’

China holds a leading position in the global market for critical minerals, particularly rare earths, lithium, cobalt and nickel. It controls more than 60% of global rare earth production, approximately 70% of lithium refining, nearly 70% of cobalt processing and over 90% of battery-grade graphite output. This dominance stems from years of state investment, technological advancements and pursuit of a national strategy centered on resource security and industrial development.

This position gave Beijing significant strategic leverage as it moved to align trade and resource policies with national priorities. However, this advantage was undermined by Pakistan’s recent decision to sell rare earths to the US.

“The first phase of this deal is envisaged at approximately US$500 million of investments into Pakistan’s critical minerals sector,” the Pakistani prime minister’s office said last month.

The South Asian country has reportedly shipped the first batch of rare earth elements to the US. Chinese media used to describe Pakistan as China’s “iron brother,” meaning that the duo have very close diplomatic and trade relations. Both countries are now developingthe China-Pakistan Economic Corridor, a key part of Beijing’s Belt and Road Initiative.

“Pakistan’s five million metric tons of rare earths reserves, worth several trillion dollars, have suddenly become a new focal point in the strategic rivalry between China and the US,”a Shandong-based columnist says in an article titled “Pakistan’s key minerals saved the US defense industry at the last moment.”

“American defense contractors urgently need these rare earths to sustain production of F‑35 fighter jets and nuclear submarines. Meanwhile, China, with 92% of the world’s rare-earth refining capacity, retains control of the key extraction and purification technologies.”

He says that the actual value of underground rare earths lies in the separation technologies because 90% ofthe 250 rare-earth minerals discovered globally occur in mixed form.

“The extraction and purification of rare earths is like picking black beans from a bowl of sesame,” he says. “Even if the US invests heavily in Pakistan’s rare-earth mining, the final products will likely fall short of military-grade standards without China’s processing expertise.”

“Pakistan may have earned quick money by accepting US investment and granting mining rights for rare earth development,” says a Shanghai-based writer who identifies himself as a financial planner, “but whether this short-term gain will turn into a long-term benefit remains uncertain. Such a deal, made amid major-power rivalry, could prove risky.”

He adds: “It will not be easy for Pakistan to strike a political balance between China and the US, while any misstep could be costly. As long as Pakistan avoids actions that hurt China’s core interests, the foundation of China–Pakistan friendship will remain strong. Pakistan needs to remember who its true brother is.”

China’s extraction know-how

China’s rare-earth extraction relies mainly on solvent extraction and ion exchange, processes that use small chemical differences to separate elements. In solvent extraction, organic liquids pull specific rare earths from solution, while ion exchange uses resin columns to isolate ions. Because these elements share similar properties, separation is challenging and often requires additional steps, such as centrifugation or electrolysis, to achieve high purity.

Chinese media have praised chemist Xu Guangxian (1920–2015) for separating praseodymium and neodymiumwith countercurrent liquid-liquid extraction. Xu’s work culminating in his 1974 success took place at a time when China was under Mao Zedong’s control during the Cultural Revolution and facing severe restrictions on scientific research.

Born in 1920 in Shaoxing, Zhejiang Province, Xu graduated from Shanghai Jiaotong University in 1944 and later earned a PhD in physical chemistry from Columbia University in the US in 1951. After returning to China, he taught at Peking University. In 1972 his department received a military assignment to separate the rare earth elements praseodymium and neodymium, which were then difficult to separate because of their similar properties.

Xu completed the task two years later using a countercurrent extraction process, which separates metals by repeatedly washing them through liquid layers with different chemical affinities. He published his findings in 1975 and became a member of the Chinese Academy of Sciences in 1980.

In fact, Xu was not the first to achieve this separation. Austrian chemist Carl Auer von Welsbach first isolated praseodymium and neodymium in 1885 through a process of fractional crystallization. In the mid-1950s, researchers at Argonne and Oak Ridge National Laboratories in the US advanced the science with liquid-liquid solvent extraction, establishing the technical foundation for achieving the 99.9% purity standards that define modern rare-earth refining.

China today maintains a dominant, near-monopoly position in the global supply of neodymium magnets, accounting for more than 85% of total production. These high-performance magnets are indispensable in advanced industries, powering the permanent-magnet motors of Tesla Model 3 vehicles, the flight control systems of F‑35 fighter jets and the vibration motors inside iPhones.

In China, well-known providers of rare earth extraction equipment include Zhengzhou Tiei Extraction Technology and Baotou Shibo Rare Earth Extraction & Equipment Co., Ltd.

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