China has reportedly issued the first batch of streamlined rare earth export permits to several magnet makers since its implementation of a new rare earth licensing regime following the recent Trump–Xi summit.
According to a Reuters exclusive, the source said at least three major producers received “general licenses” allowing faster exports to some clients.
These include: JL Mag Rare Earth (HKEX:6680), Ningbo Yunsheng (SHA:600366) and Beijing Zhong Ke San Huan High-Tech (SZSE:000970). JL Mag secured approval to ship to nearly all of its customers, while the two others obtained permits covering part of their client base.
All three companies, along with the Ministry of Commerce, declined to comment on the matter.
The new licenses stem from negotiations launched after President Donald Trump and President Xi Jinping met in late October, easing a stretch of trade tensions that had intensified when Beijing expanded rare earth export restrictions in April and again in October.
China began drafting a streamlined regime shortly after the meeting, but industry insiders cautioned that the changes would fall short of Washington’s hopes for a full rollback.
For months, exporters have been required to obtain a license for every shipment—an onerous process that buyers say caused weeks-long delays and even temporary shortages.
The rules slowed the approval of more than 2,000 EU applications, just over half of which were cleared.
The White House said after the summit that Beijing had agreed to introduce general licenses, framing the step as the “de facto end” of China’s export controls, though Chinese officials have not publicly confirmed any broader easing.
Rare earth firms innovate to bypass tightening restrictions
Facing long waits, or even outright denials, for exports containing restricted heavy rare earths, companies have turned to redesigning magnet formulas to avoid them entirely.
Employees from several leading manufacturers told the Wall Street Journal that firms have refined production techniques, including grinding materials into extremely fine particles to improve heat resistance without relying on the regulated elements.
The result is a new class of magnets that can operate at temperatures around 300 degrees Fahrenheit, suitable for many appliances though not always for automotive and aerospace applications.
Western buyers are embracing the products despite concerns about performance, with traders describing the choice as one between imperfect magnets and no magnets at all.
Other companies have turned to entirely different strategies. Because magnets themselves require licenses but assembled components do not, Chinese producers are increasingly partnering with local suppliers to embed magnets into motors or other parts before exporting them.
The practice has grown as Beijing intensifies scrutiny on smuggling and as magnet makers appoint compliance officers to ensure shipments adhere to the law.
But regulators have also moved to close loopholes. After firms began substituting holmium for other restricted elements, China added holmium to its control list in October, though enforcement has been delayed for one year under the Trump–Xi agreement.
Industry executives warn that Beijing could tighten restrictions again, given its dominant role in rare earth processing and its subsequent use as a geopolitical leverage.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.