Automakers seek Modi govt’s help in expediting approvals from China for rare earth magnet imports

Amid China’s restrictions on exports of rare earth elements and magnets, Indian automakers have sought Modi government’s help in expediting approvals from the Chinese government for importing rare earth magnets, reported news agency PTI.

China controls more than 90% of global processing capacity for the magnets, used across several sectors such as automobiles, home appliances and clean energy.

Beijing had imposed curbs, with effect from April 4, mandating special export licences for seven rare earth elements and related magnets.

Several domestic suppliers have sought approval from the Chinese government through their local vendors in China, but no approvals have been granted so far, according to the PTI report citing industry sources.

Last week, Maruti Suzuki India Senior Executive Officer (Corporate Affairs) Rahul Bharti said China has asked for an end-user certificate, endorsed by the Indian government and approved by the Chinese government.

"So that process is on and industry is in discussion with the government," he stated.

In Japan, Suzuki Motor has already suspended production of its Swift car because of China's curbs.

Rare earth magnets are used for multiple applications in electric vehicles (EVs) – electric motors, regenerative braking systems, power steering etc. They have high magnetic energy storage capacity with low coercivity at high operating temperatures.

The curbs on export of the rare earth magnets by China could have serious implications such as inflationary pressures or disruption in production for the auto industry.

The critical materials include, samarium, gadolinium, terbium, dysprosium and lutetium, which are essential in electric motors, braking systems, smartphones and missile technology.

China approves some rare-earth export applications

On Saturday, the Union Commerce Ministry said China approved a certain number of export license applications for rare earth-related metals.

The approval was granted considering rising global demand for medium and heavy rare earth elements driven by industries such as robotics and new energy vehicles, a spokesperson of the Commerce Ministry said.

Rare earth-related items have dual-use attributes for both military and civilian purposes, the spokesperson said.

China will continue to strengthen the review of compliant applications and is ready to enhance communication and dialogue on export controls with relevant countries to facilitate compliant trade, the spokesperson said.