China export controls: Overview of October 9 supply chain restrictions

Initially understood to focus on rare earth metals, China's new export controls cover an array of products including rare earth precursor materials, metals processing technology, lithium-ion batteries, superhard materials, and a variety of technological know-how.

Leading manufacturing and innovation hub Shenzhen at night. Photo by Weichao Deng via Unsplash

The October 9 developments included six official MOFCOM announcements, numbered 55, 56, 57, 58, 61, and 62. (MOFCOM announcements are sequential, meaning 59 and 60 are not yet publicly available.) These six measures institute export controls across a range of rare earths, rare earth precursors, superhard materials, certain semiconductors, and a wide range of processing equipment and materials. Full translations of all six announcements are available here courtesy of journalist Fred Gao.

Export licenses are required for products in the following sectors:

Rare Earth Metals & Precursors 

• Ores and oxides "targeting" the following REMs -- samarium, gadolinium, terbium, dysprosium, lutetium, scandium, yttrium. (Effective December 1) (full list of affected rare earth products in Annex)

• Any intermediate or end product containing more than 0.1% of the following metals: samarium, dysprosium, gadolinium, terbium, lutetium, scandium, yttrium, samarium-cobalt alloy, terbium-fe alloy, dysprosium-fe alloy, terbium-dysprosium-fe alloy, dysprosium oxide, terbium oxide. (Effective December 1)

• The following metals and related precursor materials: holmium, erbium, thulium, europium and ytterbium. (Effective November 8)

Rare Earth Processing Equipment, Materials, & Process Technology 

• Any technology used to make listed rare earth metals or ores and oxides targeting listed products in Annex below. (Effective December 1)

• Technology related to 1) rare earth mining, refining, and smelting or 2) rare earth production (e.g., repair of production lines). This includes any Chinese citizen inside or outside China sharing any information related to these topics. (Effective immediately)

• A wide array of processing equipment including forming presses and mills for rare earth magnets; vacuum sintering furnaces; machining equipment; select valves and manifolds; a variety of rare earth crystal growth furnaces; reduction furnaces; electrolytic equipment and cells; extraction tanks; kilns; and extraction and impurity removal equipment. (Effective November 8)

Lithium-Ion Battery and Synthetic Graphite Anode Material-Related Items

• Li-ion batteries whose gravimetric energy density is greater than or equal to 300 Wh/kg (these are mostly advanced solid-state and nickel-cobalt-manganese (NCM) batteries). (Effective November 8)

• Select equipment and process technology used in the manufacture of li-ion batteries. (Effective November 8)

• Cathode materials for manufacturing li-ion batteries, including lithium iron phosphate (LFP), NCM, lithium-rich manganese-based materials, and nickel-cobalt-aluminum hydroxide.  (Effective November 8)

• Select equipment for producing li-ion battery cathode materials.  (Effective November 8)

• Synthetic graphite anode materials; mixed natural/synthetic graphite anode materials, processing equipment, graphitization equipment, and select processes and technologies related to the production of graphite anode materials.  (Effective November 8)

Select Semiconductors / Chips 

• Case-by-case approval of export applications for R&D and production of 14-nanometer and below logic chips or 256-layer and above memory chips, as well as production equipment, testing equipment, and materials for manufacturing the above-mentioned process semiconductors. (Effective December 1)

Superhard Materials 

• Artificial diamond crystals and micropowder suitable for semiconductor manufacture and other high-precision applications. (Effective November 8)

• Artificial diamond wire saws and grinding wheels suitable for manufacture of high-precision products. (Effective November 8)

• Direct-current arc plasma jet chemical vapor deposition (DCPCVD) equipment and process technology to make this equipment, which is used in the semiconductor, medical device, and industrial diamond manufacturing industries.  (Effective November 8)

Announcement 61 Annex

Annex from Announcement 61 on rare earths, which is important to understand the impacted materials.

Part I

• Samarium metal

• Dysprosium metal

• Gadolinium metal

• Terbium metal

• Lutetium metal

• Scandium metal

• Yttrium metal

• Samarium-cobalt alloy

• Terbium-Fe alloy

• Dysprosium-Fe alloy

• Terbium-dysprosium-Fe alloy

• Dysprosium oxide

• Terbium oxide

  
  

Part II

I. Rare earth permanent magnet materials

1. Samarium-Cobalt permanent magnet materials

2. NdFeB permanent magnet materials containing dysprosium

3. NdFeB permanent magnet materials containing dysprosium

4. Parts, components, and assemblies containing the foregoing materials

II.   Rare earth target materials

1. Target materials containing samarium:

a. Samarium target

b. Samarium-cobalt alloy target

c. Samarium-Fe alloy target

2. Target materials containing gadolinium:

a. Gadolinium target

b. Gadolinium-Fe alloy target

c. Gadolinium-cobalt alloy target

3. Targets containing terbium

a. Terbium target

b. Terbium-cobalt alloy target

c. Terbium-dysprosium-iron alloy target

4. Targets containing dysprosium

a. Dysprosium target

b. Terbium-dysprosium-iron alloy target

5. Lutetium target

6. Scandium target

7. Targets containing yttrium

a. Yttrium target

b. Yttrium-aluminum alloy target

c. Yttrium-zirconium alloy target

Implications of China's new export controls

This companion post on the Cascade Blog assesses what these new export controls mean for U.S.-China relations, and how manufacturers should think about them.

Want to discuss what these export controls mean for your organization? Contact us at info at cascade advisory dot co.