China continues to tighten the reins on rare earths, which are so crucial for the high-tech and defense industries (among others). The Ministry of Commerce in Beijing has specified and expanded the existing export restrictions for processing technologies. For the first time, it is explicitly stated that foreign customers from the defense sector will not receive permits, and applications related to advanced semiconductors will only be reviewed on a case-by-case basis. These measures follow regulations introduced in April and are once again putting pressure on global rare earth supply chains – despite temporary relief from additional export licenses.
What Exactly is Changing with the Export Rules?
The core of the adjustments is the expansion of technology controls surrounding rare earths. This affects processes for the processing and separation of the 17 elements, as well as the manufacturing of permanent magnets. Beijing specifies that the restrictions cover several types of magnets and that certain assemblies and components with embedded magnets also fall under the regulations. Also new: Equipment and technologies for recycling rare earths will only be exported with a license.
With the clarification of who is considered an end-user, China is drawing a sharper line. Military buyers abroad will generally not receive permits. Applications in semiconductor manufacturing – for example, where high-performance magnets or special alloys play a role in the process chain – will be individually assessed in the future. Companies along the value chain must therefore provide more detailed proof of how materials and technologies are used and factor in extended processing times.
Why Rare Earths are in Focus
Rare earths are strategic raw materials. Although they are not geologically extremely rare, their extraction and separation are complex and capital-intensive. China has dominated downstream processing for years – according to common estimates, over 90% of the world’s refined rare earth products and a large proportion of permanent magnets originate from the country. Neodymium-iron-boron (NdFeB) magnets, in particular, are indispensable in technologies ranging from electric cars and wind turbines to aircraft engines and radar systems.
The now tightened rules aim less at raw material extraction and more at controlling know-how in crucial process steps. This is precisely where the leverage lies: whoever controls the technologies for separation, purification, alloy formation, and magnet production determines the pace and direction of global industries. For buyers, these measures mean increased verification and compliance efforts – from the origin of the concentrates and the process route to the final application area.
Ucore Rare Metals: at the Heart of the Action
Right in the midst of this explosive situation is the Canadian Ucore Rare Metals (WKN A2QJQ4/ TSXV UCU), which possesses a method for processing rare earth raw materials called RapidSX – a method superior to conventional procedures! Ucore recognized the escalating situation years ago and deliberately decided to establish itself as part of a Western rare earth supply chain. RapidSX, according to the company, is not only faster than the solvent extraction (SX) commonly used in China but also has a less negative impact on the environment.
Ucore plans to commission an initial production line as early as the second half of 2026. In the plant in the US state of Louisiana, which is already being funded by the US Department of Defense with a total of more than USD 22 million, further production lines are then to be put into operation gradually. Ucore recently also announced a cooperation with an Australian technology company, which should also allow the use of material from a wide variety of sources such as electronic scrap.
Conclusion: With the renewed adjustment of its export rules, China is shifting its focus from mere quantity control to technological access control for rare earths. This increases pressure on international industries to make the origin and use of materials more transparent and to build alternative sourcing and processing paths. And this is precisely where Ucore Rare Metals comes into play. The technology company’s stock has already benefited significantly, but we believe that the end of the line – even if Ucore remains a risky speculation – has not yet been reached. We will keep you updated!
Ucore’s stock has risen by a sensational 857.5% in 2025! Source: TradingView
