It has been 5 years since The Rare Earth Observer first appeared in this remote corner of the internet. It has been an unexpected, roaring success.

We will continue being brutally honest, edgy and thoroughly unrefined.

We are grateful to our contributors, anonymous or not, and readers.

Both, the U.S. and China created so much pressure on one-another, that both were eager to break the ice at the trade talks in Geneva.

The pause of 90 days still means prohibitively high tariffs of 30% for China’s exports to the U.S., just no longer absurd three digits.

Since rare earths are on the White House exemption list anyway, no impact on the U.S. side. But U.S. tariffs are resting on China’s rare earth permanent magnets.

Reports on Fox News, Bloomberg and others claimed that China would revert to the conditions before 2 April 2025. The dual-use licensing on 7 rare earths was introduced on 4 April 2025. However, we could find no evidence of this happening.

Both, Fox and Bloomberg quickly pulled relevant reports.

Under the dual-use license scheme, of

is subject to dual-use licensing due to China’s commitments under the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), which it signed in 1968.

As ever, Japan is most affected, as it regularly buys ca. 40% of China’s total rare earth export value. Japan, the only nation to have ever experienced a nuclear weapons attack, has no nuclear weapons.

If China was lifting of the 4 April 2025 measure to declare these 7 rare earth elements as dual use products, it would imply that China’s commitments under international treaties were for sale. Impossible.

China lifted the prohibition of doing business with 17 plus 28 U.S. companies on China’s entity lists for 90 days. These lists also contain a collection of U.S. defense contractors. Even though China declared long ago, that it does not wish to aid the production of weaponry that can threaten China, the ban on doing business with these U.S. defense contractors is temporarily lifted.

Allowing these U.S. companies incl. defense contractors to continue buying Chinese rare earth permanent magnets or other rare earth products should be a real hard sell to China’s nationalist-supercharged populace and bureaucracy.

If we assume that these U.S. defense contractors should find willing exporters among previous or new suppliers (henceforth deemed traitors?), these Chinese exporters can then apply for a dual-use product export license from MOFCOM.

For such dual-use export license applications a lot of disclosure by end-users is necessary. MOFCOM may add additional, detailed questions which the U.S. defense contractors may not want to answer or may need to ask Pentagon for permission to disclose.

All things considered, U.S. defense contractors’ attempts to purchase dual-use goods from China may not necessarily be successful.

The German Chamber of Commerce in China (AHK) comments:

Although substantial results were achieved between China and the U.S. regarding the tariffs, and the lifting of export controls has been announced from the Chinese side, . This might be the case until a formal agreement is reached between the two sides. Also, there are indications of a sustained strong emphasis on export control in the future(e.g. a new bureau on export control, and a conference with major provinces having strategic minerals). Consequently, the current situation remains unclear, leading to ongoing uncertainty.

The conference referred to is this one, which does not sound like lifting of export controls at all:

In order to thoroughly implement the decisions and deployments of the CPC Central Committee and the State Council, on May 12, 2025, the Office of the National Export Control Coordination Mechanism organized the and other departments and local competent departments of provinces with concentrated strategic mineral resources such as Inner Mongolia, Jiangxi, Hunan, Guangdong, Guangxi, Guizhou, and Yunnan to hold a deployment meeting on strengthening the full-chain control of strategic mineral exports in Changsha, Hunan Province.

The meeting pointed out that strategic mineral export control is related to national security and development interests, and strengthening the control of the entire export chain is the key. All departments and localities should strengthen the training and guidance and daily supervision of relevant business entities in their fields and regions, adhere to the principle of "prevention first, disposal first", closely track the flow of strategic minerals, strengthen information research and sharing, and promptly carry out early warning and related disposal to prevent the illegal outflow of strategic minerals.

The meeting stressed that all departments should work closely together, in accordance with their division of responsibilities, conscientiously perform their regulatory duties in all links of strategic mineral mining, smelting, processing, transportation, manufacturing, sales, and export, and effectively strengthen full-chain control; local people's governments should strengthen their local regulatory responsibilities, conduct a systematic survey of enterprises in all links of the entire chain of strategic mineral exports in their regions and establish a ledger, guide local enterprises to strengthen the construction of compliance systems, improve corporate compliance awareness and capabilities, and work together to ensure that control measures are implemented in place.

The meeting required that all departments and localities should strengthen horizontal coordination, connect vertical cooperation, and promote the effectiveness of the full-chain control of strategic mineral exports with a resolute attitude and strong measures, and resolutely safeguard national security and development interests.

Does this sound like de-regulation to you?

China used to have a WTO-incompatible system of regulating rare earth exports:

In March 2012 the EU, Japan and the U.S. launched a WTO claim against China for incompatibility of this system with WTO rules. China was defeated and also lost on appeal.

At the end of 2014 China complied and did away with the export limitations, except for still not refunding VAT upon exports of rare earth. China maintained the production quota, a domestic affair.

Actually, China’s withholding of VAT refund upon export of raw materials is at the core of China’s continued downstream cost advantage. If China was to handle VAT refund upon export like every other VAT-economy, processed raw material cost would quickly equalise globally through trade, diminishing China’s cost advantage. We have been preaching this issue for 11 years now, but particularly the EU Commission is too recalcitrant to understand how this works. In our view a WTO non-compliant, highly manipulative measure of China, that can’t be justified.

With China losing its WTO appeal in 2014, all efforts of the U.S. government to diversify rare earth sources came to a screeching halt.

In June 2015 Molycorp collapsed.

The EU continued looking for ways, but was unable to generate anything that made any sense in the 10 years since then. No matter how still-born a project, as long as it ticked woke, green boxes it was supported and predictably came to nothing.

Now we are back at pre-2014 times, but this time China’s bureaucracy has made the system legally watertight, using Xi Jin Ping’s trademark rule of law (no matter how kafkaesque the one or the other law may be).

N.B.: China seems to have never officially given up on its target to export maximum 30,000 t/y of rare earth compounds (actual China export 2024: 46,000 t).

According to the Ministry of Commerce's Announcement No. 18 of 2025, China has implemented export controls on seven types of medium and heavy rare earth-related items, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium.

Announcement No. 18 of the Ministry of Commerce in 2025: Permanent magnetic materials containing elements such as samarium, terbium, and dysprosium (such as samarium-cobalt magnets and neodymium-iron-boron magnets containing terbium/dysprosium) are included in the scope of control, and an additional application for an export license for dual-use items is required.

…

2. Scope of control and exemption conditions

Directly controlled items: Samarium cobalt permanent magnet materials (such as SmCo5, Sm2Co17).

NdFeB permanent magnet materials containing terbium (Tb) (such as NdFeB-Tb).

NdFeB permanent magnet materials containing dysprosium (Dy) (such as NdFeB-Dy).

Scientific research cooperation or humanitarian aid projects approved by the Ministry of Commerce.

This low limit affects so many products, that MOFCOM should be totally overwhelmed.

Any more questions, why the dual-use licensing takes so long?

In our previous post we pointed at an unusual spike of Estonia’s imports of rare earth permanent magnet blanks and speculated that perhaps this may be related to Neo Performance Materials’ new Narva magnet factory.

Neo confirmed to us that the spike of magnet blanks imports in Estonia was indeed related to Neo’s commissioning activity from the blanks cutting process onwards.

The samples for EU customers, 18,000 pieces, were produced entirely of imported rare earth metals from Neo’s variety of sources, according to Neo.

Amvest Terraden nailed it again. On the U.S.-Ukraine resource deal:

The deal is rightly perceived as Kyiv’s resounding diplomatic triumph, with an economic value somewhere between “unknown” and “zero.”

Some Ukrainian think tanks estimate that as much as 40% of the identified resources are located in the subsoil of the territories currently occupied by Russia.

You can subscribe to Amvest’s Clean Energy Essentials newsletter here. Even though we don’t see eye-to-eye on many subjects, we highly recommend it for its differentiated, well-researched, well-written insights.

As we pointed out before, there is no association, coordination or any other relationship between Amvest Terraden and The Rare Earth Observer.

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US President Donald Trump has secured $200 billion in deals during a visit to the United Arab Emirates, according to the White House, including agreements involving artificial intelligence that will boost the Gulf nation’s technological ambitions.

The announcements came during the third and final leg of the US president’s visit to the Middle East, where he highlighted investments earlier in the week of $600 billion from Saudi Arabia and more than $243 billion with Qatar. Trump made scoring business deals a centerpiece of his first planned overseas trip since returning to office.

e deals and initiatives with the UAE include:

AI has been central to many of the agreements Trump has negotiated in the region. Gulf nations have been eager to secure greater access to cutting-edge chips in a bid to become hubs for the emerging technology and diversify their economies. Thursday’s announcements include:

• Amazon Web Services Inc., e& — formerly telecom company Etisalat — and the UAE Cybersecurity Council will partner on bolstering public cloud services in the country.

The Trump administration had been weighing a deal that would allow the UAE to import more than a million advanced Nvidia Corp. chips. Trump has also worked out arrangements for parties in Saudi Arabia to acquire tens of thousands of semiconductors from Nvidia and Advanced Micro Devices Inc. The flurry of AI deals, though, has opened a rift within the administration, where China hawks are increasingly concerned that the projects put US national security and economic interests at risk.

The UAE Nvidia H100 GPUs deal is fully incomprehensible, in view of the UAE state-backed G42 holding has strong, historical ties to China’s Huawei. Why would the current U.S. administration allow another AI hub at all, and then one with deep China ties?

Large scale U.S. inbound investment by certain other foreign nations like China would be deemed alarming and would certainly be a matter of national security concern.

Every nation, no matter how big or small, is striving for power. It is an illusion to assume, that in case of Saudi Arabia, Oman and UAE this should be different.

Also-ran MP Material’s MoU with Saudi Arabia’s Ma’aden was not even mentioned in Bloomberg’s article.

Meanwhile, Moody’s downgraded U.S. sovereign debt:

Located in Russia’s northwestern region of Murmansk, the Lovozero Mining and Processing Plant (part of Rosatom’s mining division) produces loparite ore. Loparite is a mineral containing titanium, tantalum, niobium, and rare earth elements (REE). The Lovozero MPP is Russia’s only producer of REE-containing concentrate, which is then shipped to the Solikamsk Magnesium Plant (SMP) in the Urals.

The production at SMP is arranged to allow for the fullest use of commercial components contained in feedstock materials. When SMP produces magnesium, which is its primary product, it also obtains chlorine as a byproduct. Chlorine is used to treat loparite concentrate and extract rare earth elements. The resulting rare earth chlorides then pass several processing operations to be turned into a mixed rare earth carbonate, which is exported so far SMP has already taken steps to set up a separation process in house and produce individual compounds of cerium, lanthanum, neodymium, praseodymium, and concentrates of middle rare earth elements (samarium, gadolinium, and europium)

Saint Petersburg-­based company Rusredmet has built a pilot separation plant for mixed rare-earth concentrates on commission from SMP. The process flow is as follows: the mixed concentrate is dissolved in nitric acid. The resulting nitrate solution is electro-­oxidized to extract first cerium and then other elements. The extraction is followed by precipitation, drying and annealing. The separation plant is expected to be put in operation in 2026.

Its planned capacity is 2,500 tonnes of cerium, lanthanum, neodymium and praseodymium compounds per year. Of these, 18 % (450 tonnes) will be neodymium and praseodymium oxides, which is equivalent to 370 tonnes of metal. The individual compounds obtained will be used in various industries, particularly in glass-­making, metallurgy and production of catalysts.

Another REE consumer industry should soon appear in Russia through Rosatom’s efforts. This will be the production of permanent rare earth neodymium-iron-boron (NdFeB) magnets, in which neodymium and boron account for about half of the mass. According to the International Renewable Energy Agency (IRENA), production of rare-earth magnets consumed 29 % of global REE supply in 2022.

Rusatom MetalTech (part of Rosatom’s fuel division) is developing engineering documents for the first 1,000 tonne production line. The NdFeB magnet plant will be launched in Glazov (Russia) in 2028. With the second production line installed, the plant’s capacity will increase to 3,000 tonnes of permanent magnets per year. This quantity will be enough to almost fully meet the needs of key Russian industries for these products.

Comprehensive, methodical, logical.

Rosatom is a relatively new creation from 2007, formed from the Federal Agency on Atomic Energy, which in turn had been created from merging several agencies in 2004.

In 2021 a Russian company approached us for a process for the Kutessay II rare earth mine in former Soviet Republic of Kyrgyzstan, which had ceased operations in 1992.

When we asked why they would not use the extensive experience in Russia from Soviet times, they said there would be no-one alive in Russia who had any hands-on experience in the industrial separation of rare earths and that the old processes used during Soviet times were deemed to be totally outdated.

So why is it suddenly such smooth rare-earthy sailing for Rosatom?

We suspect the same way the USSR always got things going: Non-traditional technology transfer.

Process documentation and blue prints already in Russian language would be particularly convenient for such “transfer.”

Once is an accident; twice is a coincidence; three times is opposition action.

The head of the Ministry for the Development of the Russian Far East, Alexey Chekunkov, said that the Lovozero deposit in the Murmansk region contains cerium, lanthanum and neodymium. The Afrikandskoye deposit in the region is no less promising. In this regard, it is planned to create a cluster for deep processing of rare earth metals (RM and REE) in the Murmansk region, the minister added.

"The Arctic zone of Russia plays a key role in the extraction of RM and REE. The Arctic accounts for 97% of explored reserves and 100% of REE production, 95-100% of niobium, tantalum, zirconium, gallium and rubidium production, as well as two-thirds of cesium mined in Russia. In addition, significant reserves of rhenium, indium, lithium and scandium have been explored in Arctic deposits, but are not yet being extracted," Mr. Chekunkov said in an interview with TASS .

He specified that the Afrikandskoye deposit contains 50 million tons of titanium dioxide, more than 850,000 tons of rare earths, including neodymium, praseodymium and scandium, as well as 300,000 tons of niobium and tantalum. Earlier, the press service of the Presidential Plenipotentiary Envoy to the Far Eastern Federal District Yuri Trutnev announced plans to create a chemical and metallurgical complex at the Afrikandskoye deposit. About 17 billion rubles [US$211 mio] may be invested in the project. 660 people will be provided with jobs.

According to Rosnedra, the share of rare and rare earth metals in the Arctic is 75% of all Russian reserves. The region contains 78 types of REE [?], 33 of which are considered strategic.

3 years ago Interfax reported, that there was a defense ministry facility at the Afrikanskoye site, which was yet to be moved before activities could proceed.

The resource at Afrikanskoye is perovskite.

Arcmineral Resources, a junior miner there, said at the time, that it was planning to annually produce more than 66,500 tonnes of titanium dioxide, about 4,000 tonnes of rare earths and more than 1,000 tonnes of tantalum and niobium at Afrikanskoye.