Rare Earths and Critical Minerals:
How China’s Export Controls Are Reshaping Supply Chain Due Diligence

Rare earths are the building blocks of modern industry—they make electric motors spin, wind turbines generate power, smartphones vibrate, and precision weapons find their targets. But the global supply of these 17 elements is concentrated in one country. In 2025, China fundamentally rewrote the rules of the game, imposing a sweeping set of export controls that reach far beyond its borders. For any international business that depends on rare earths—whether as a manufacturer, contractor, or investor—understanding these new rules and vetting your Chinese suppliers accordingly is no longer optional. This guide explains what changed, how it affects you, and exactly what steps you need to take in your due diligence process.

1. The New Reality of Rare Earth Sourcing

For years, rare earths were a niche concern—important, but not front-page news. That changed in 2025. The Chinese government, through its Ministry of Commerce and the General Administration of Customs, issued a series of coordinated announcements that collectively represent the most significant expansion of export controls in China’s modern history. These rules do not just restrict the export of rare earth ores and metals; they also cover processing equipment, manufacturing technology, and—most strikingly—products made outside China that contain even trace amounts of Chinese-origin rare earths.

2. China’s Grip on the Value Chain

To understand the impact, you first need to grasp the scale of China’s dominance. It is not just about mining—it is about processing and manufacturing.

In 2025, global rare earth mine production reached approximately 390,000 metric tons of rare-earth-oxide equivalent. China’s output stood at 270,000 tons—69.2% of the total. But mining is only half the story. China also controls roughly 90% of the world’s refining capacity and over 90% of permanent magnet manufacturing. This means that even if a company in Australia or the US mines rare earths, those raw materials must typically be sent to China for separation and processing, creating a single point of failure in the global supply chain.

3. The 2025 Export Control Framework

The new rules, rolled out in October 2025, consist of multiple interconnected measures. Here is a plain-English summary of the key components.

What this means in practice: If you are buying a magnet from a Chinese supplier, that supplier must now obtain a specific export license from China’s Ministry of Commerce (MOFCOM). The application requires detailed end-user information—your company’s name, registered address, business scope, and a statement of intended use. For defense-related or AI-enabled applications, licenses are almost always denied.

4. Business Impact Across Industries

No single sector is immune, but the impact varies. Here is a breakdown by industry.

5. Due Diligence: How to Vet a Chinese Rare Earth Supplier

Given this regulatory landscape, here is a step-by-step framework for verifying any Chinese company that supplies rare earths or related products.

Step 1: Obtain the Official Enterprise Credit Report

The foundation of any due diligence is the official enterprise credit report from China’s National Enterprise Credit Information Publicity System (NECIPS). This government-issued document tells you:

• Legal status: Is the company actively operating (status “存续”) or has it been cancelled or revoked?
• Business scope: Does it explicitly include rare earth mining, processing, trading, or magnet manufacturing? If not, that is a red flag.
• Registered capital: Is it consistent with the scale of operations they claim?
• Shareholders and legal representative: Who really owns and controls the business?
• Administrative penalties and blacklist records: Any history of regulatory violations?

The official system (gsxt.gov.cn) is in Chinese and requires local ID verification. For international users, services like ChinaBizInsight can retrieve and translate official reports directly from the government system.

Step 2: Verify Export License Status

Ask your Chinese supplier for proof of their MOFCOM export license covering the specific rare earth products you are purchasing. The license should clearly list the product categories, quantities, and end-user information. Without this, the shipment cannot legally leave China.

Step 3: Check Industry-Specific Permits

• Ministry of Natural Resources: Mining and exploration licenses.
• Ministry of Ecology and Environment: Environmental permits—rare earth processing is highly polluting.
• “Credit Energy” platform (信用能源): A public database of energy-sector companies, including penalty records.

Step 4: Conduct Financial Health Checks

• Review annual reports filed with NECIPS (publicly available for many companies).
• Check tax compliance records through the State Taxation Administration.
• For deeper analysis, consider specialized financial and tax reports that access non-public data.

Step 5: Monitor Policy Changes

China’s export controls are dynamic. In early 2025, controls expanded to include tungsten, tellurium, bismuth, molybdenum, and indium. In October, the “combination punch” added new categories. Stay alert—what is allowed today may be restricted tomorrow.

6. Red Flags and Risk Indicators

China’s 2025 rare earth export controls are a watershed moment. The extraterritorial reach, technology restrictions, and end-use limitations mean that every international business that touches rare earths must now treat supply chain due diligence as a strategic imperative. The companies that invest time in verifying their Chinese partners—checking licenses, financial health, and regulatory compliance—will be the ones that navigate this new era successfully.

At ChinaBizInsight, we provide the official records and deep-dive reports you need to make informed decisions. From basic enterprise credit reports to professional due diligence and executive background checks, we help you know your Chinese partners—before you sign that contract.