China is the world’s largest producer of critical metals used in manufacturing magnets essential for the automotive, electronics, and defense industries.

China announced additional export controls on rare earth technologies and their elements, tightening the existing regulations related to this vital sector.

Rare earth metals have been a major point of contention in recent trade negotiations between China and the United States, with Washington accusing Beijing of delays in issuing export licenses.

The Chinese Ministry of Commerce stated that the new controls, effective immediately, require exporters to obtain permits for technologies used in mining and smelting rare earth metals, among other processing steps.

The ministry added that these controls will also apply to technologies used in “assembling, modifying, maintaining, repairing, and developing production lines.”

In another announcement, the Ministry of Commerce imposed additional restrictions on foreign entities exporting related materials outside China.

A ministry spokesperson said in a separate statement that “for some time, certain organizations and individuals abroad, directly or after processing, have transferred or provided controlled rare earth metals of Chinese origin… for direct or indirect use in sensitive areas such as military operations.”

The statement added that these practices caused “serious damage or potential threats to China’s national security and interests, negatively affecting international peace and stability.”

The European Commission expressed “concern” over China’s announcement of the new controls.

EU Trade spokesperson Olov Giel told reporters, “The Commission expects China to be a reliable partner and to ensure stable and regular access to critical raw materials.”