Beijing banned shipments of important supplies
to 14 companies on the cutting edge of chemicals processing, electric motors and
defense.
·
China's
Ministry of Commerce has banned exports of dual-use materials and
products to 14
companies in the European Union.
·
The
restrictions affect access to critical minerals and materials used in advanced
manufacturing.
·
The
latest measures follow China's blacklisting
of two American companies last month that are
involved in developing U.S. rare-earth magnet supply chains.
·
China
announced the restrictions one day after the European Union imposed
sanctions on 14 Chinese and Hong Kong companies
accused of supporting Russia's military-industrial complex or helping
circumvent EU sanctions related to the Ukraine war.
·
The
export ban covers materials classified by China as dual-use,
meaning they have both civilian and military applications.
·
The
restrictions could limit European companies' access to minerals needed for:
o Rare-earth magnets
o Semiconductors
o Advanced alloys
o Specialty chemicals
·
The
affected materials are essential for manufacturing:
o Electric vehicles
o Offshore wind turbines
o Robots
o Drones
o Advanced electronics
o Defence equipment
·
Over
the past 16 months,
China has increasingly used its dominance in rare
earth mining, refining, and processing as a
strategic tool in trade and geopolitical disputes.
·
The
blacklist includes Rheinmetall,
Germany's largest defence contractor.
·
The
company relies on tungsten and
rare earth materials for military equipment production.
·
Several
companies that convert critical minerals into high-value alloys and specialty
chemicals have also been targeted.
·
These
firms possess much of Europe's remaining expertise in advanced rare-earth
processing.
China has progressively tightened controls
by:
·
Restricting
exports of tungsten, antimony, gallium, and
germanium in late 2024.
·
Imposing
export controls on seven rare-earth elements in
April 2025.
·
Announcing
plans to restrict five additional rare-earth elements from
November.
·
The
United States and the European Union are investing in:
o New critical mineral mines.
o Processing and refining facilities.
o Rare-earth alloy production outside China.
·
However,
establishing these supply chains remains technically difficult and
environmentally challenging.
·
China
continues to dominate:
o Rare-earth refining.
o Metal conversion.
o Alloy production.
·
Most
global processing capacity remains concentrated in China.
·
Sindlhauser
Materials was among the companies restricted.
·
The
company produces yttrium-zircon alloys,
which are used in advanced semiconductor manufacturing.
·
Yttrium
has become one of the rarest rare-earth materials available outside China.
·
Manufacturers
of semiconductor production equipment have reported severe shortages of yttrium
compounds, following China's export controls.
·
China
also restricted exports to Lafert
Group, a leading Italian manufacturer of custom
electric motors containing high-performance rare-earth magnets.
·
Lafert's
products are widely used in industrial automation and robotics.
·
While
restricting exports of rare-earth materials and magnets, China continues to
permit exports of finished electric motors containing
rare-earth magnets.
·
This
policy encourages multinational companies to manufacture more products within
China.
·
The European
Union Chamber of Commerce in China has
criticized China's broad interpretation of "dual-use" products.
·
Businesses
argue that the restrictions create uncertainty for commercial supply chains
unrelated to military applications.
China
has expanded its use of critical minerals and rare-earth export
controls as a strategic response to geopolitical
tensions, extending restrictions from U.S. firms to 14
European companies. The move underscores Beijing's dominant
position in global rare-earth processing and highlights the growing importance
of critical mineral supply chains in international trade, technology, and
defence competition.
[ABS News Service/25.07.2026]
Last
month, China blacklisted two American companies crucial to U.S. efforts to create
a supply chain for making powerful rare earth magnets.
On
Friday (24.07.2026), Beijing took similar action against even more companies in
Europe.
China’s
Ministry of Commerce announced that it had banned any further shipment to 14 companies
in the European Union of “dual-use” materials or products — items that China describes
as potentially having both military and civilian applications. As a result, the
companies may struggle to buy many of the critical minerals they need to make products
like rare-earth magnets and semiconductors, which are essential for cars, offshore
wind turbines, robots, drones and other advanced manufacturing applications.
Over
the past 16 months, China has used its dominance over the mining and processing
of rare earths as leverage in economic disputes with trading partners.
In
a statement on Friday, the Commerce Ministry noted that it had acted one day after
the European Union imposed sanctions on 14 companies in mainland China and Hong
Kong in connection with Russia’s war effort in Ukraine. The European Union said
these companies, along with 24 Russian companies and 10 firms elsewhere, were “entities
that are part of or support Russia’s military-industrial complex or enable the circumvention
of E.U. sanctions.”
Many
of the European companies targeted by China play a crucial role in turning rare-earth
metals and other critical minerals, like antimony and tungsten, into alloys and
specialty chemicals that manufacturers need.
Also
on China’s list was Germany’s largest defense contractor,
Rheinmetall, which has been central to Germany’s effort to rearm after Russia’s
full-scale invasion of Ukraine in 2022. Military hardware uses a lot of superhard
tungsten and some rare earths.
Critical
minerals have received growing attention in the West, especially since China imposed
export restrictions in late 2024 on four critical but obscure minerals: tungsten,
antimony, gallium and germanium. China then put export restrictions in April last
year on seven kinds of rare-earth metals that are crucial to a very wide range of
manufacturing, and has announced plans to impose restrictions in November on five
more kinds of rare-earth metals.
The
Trump administration and the European Union are each trying to build mines for critical
minerals and construct refineries that can turn ore into pure mineral powders and
eventually into strong metal alloys. The production process is complex and can be
dirty: Converting the powders into metals involves sometimes toxic chemicals.
Almost
all of the world’s capacity for rare-earth-metal conversion and alloy making is
in China. Many of the European companies targeted by China on Friday are small and
medium-size enterprises that hold what little expertise remains outside China for
the advanced processing of critical minerals.
One
of the companies on China’s list is Germany’s Sindlhauser
Materials. Sindlhauser’s website says it makes yttrium
alloys with zircon. Yttrium and samarium have been the two kinds of rare earths
in shortest supply outside China after Beijing imposed export controls, with prices
rising as much as a hundredfold.
Yttrium
alloys with zircon are used in making advanced semiconductors. Makers of semiconductor
manufacturing equipment have been complaining for months about acute shortages of
yttrium compounds.
Sindlhauser declined to comment on China’s action.
Another
company restricted by China was one of Europe’s premier manufacturers of custom-designed
electric motors with powerful rare-earth magnets inside, Italy’s Lafert Group. Lafert’s motors power
many of the robots and other industrial automation in Europe’s factories.
Beijing
has been encouraging multinationals to move more of their supply chains into China,
including buying electric motors from Chinese companies. While Beijing has severely
restricted exports of rare earths and rare-earth magnets, it has allowed unrestricted
exports of fully assembled electric motors with the rare-earth magnets already inside.
Rheinmetall
and Lafert did not immediately respond to requests for
comment.
The
European Union Chamber of Commerce in China has previously criticized the very broad
dual-use designations on many critical minerals like those that China cited to restrict
sales to the 14 European companies on Friday.