On October 9, 2025, China's Ministry of Commerce issued Announcement No. 62. It requires a license for the export of all technology related to rare earth mining, smelting and separation, metal refining, magnetic material manufacturing, and recycling. The scope extends beyond the technology itself to include know-how for assembling, debugging, maintaining, repairing, and upgrading production lines. It further prohibits Chinese citizens and legal entities from providing "substantive assistance" to overseas rare earth-related activities without authorization.
This regulation is an extension of technology export controls that began in 2002, but the 2025 version has a dramatically broader scope of application. It even includes an extraterritorial application clause: if a product manufactured overseas contains 0.1% or more of rare earth metal originating from China, Chinese export approval becomes necessary. This structure mimics, as a rare earth version, the "Foreign Direct Product Rule (FDPR)" that the United States uses for semiconductors.
Yet this same China, a mere ten months later, incorporated "rare earth element exploration and processing" into an academic cooperation program with Iran. While tightly clamping down on the outflow of its own technology overseas, it opens the door to a specific partner. This asymmetry is the key to interpreting this move.
The Geopolitical Weight of a 30,000-Yuan Workshop
According to the 2026 joint workshop call for proposals published by NSFC on August 10, five fields were selected in cooperation with the Iran National Science Foundation (INSF). Alongside rare earth exploration and processing, these include nanomaterials for disease detection, pollution monitoring, seismic-resistant construction, and environmentally conscious manufacturing. The grant amount is 30,000 yuan (approximately 70,000 yen) per project. The Chinese side covers conference costs, accommodation, and domestic transportation, while the Iranian side covers international travel expenses for Iranian participants and accommodation costs for Chinese researchers visiting Iran. The application period runs from August 10 to September 24, 2026, the research implementation period is from January to December 2027, and the execution period is one week. The planned number of selected projects is approximately seven.
Looking at the numbers alone, this is an underwhelming scale for a national resource strategy. However, the fact that this framework officially named "rare earth processing technology" as a subject of cooperation carries geopolitical weight far exceeding the 30,000-yuan grant amount. NSFC and INSF have continued joint research in fields such as mathematics, biology, medicine, renewable energy, and materials science since signing a memorandum of understanding (MOU) in Beijing in 2017. The workshop program itself began in 2024, but this is the first time rare earths have been included as a subject.
South Korean media outlet Seoul Economic Daily pointed out that this timing comes right before the US-China summit scheduled for September, and reported an analysis suggesting an intent to provoke the United States.
Iran's Geological Potential and the Distance to Industrialization
Central Iran spans geological structures expected to contain rare earths. According to an analysis published in February 2026 by the Netherlands' Hague Research Institute, rare earth anomalies were confirmed across approximately 7,000 square kilometers in central Iran. The targets are the phosphate deposit (Esfordi deposit) and the iron-apatite deposit (Chadormalu deposit), where monazite and apatite crystals contain high concentrations of light rare earth elements such as lanthanum, cerium, and neodymium.
The Iranian government is also moving independently. In April 2025, Minister Mohammad Atabak of the Ministry of Industry, Mining and Trade launched the country's first monazite production plant at the Abbas Abad Industrial Park near Tehran. Reserves of approximately 125 million tons have been confirmed at two mines in Yazd Province, processing 60 tons of soil per day. However, this is a pilot-scale facility and has not reached commercial industrial scale.
Exploration range is further expanding. According to Iranian state media Press TV, current exploration is concentrated across 24,000 square kilometers in central Iran, and rocks containing augite, zircon, apatite, and pyrite have also been confirmed in the northeast and northwest.
| Indicator | Current State of Iran | China (Reference Standard) |
|---|---|---|
| Rare earth mine production | No commercial production (pilot stage) | Approximately 270,000 tons annually (2025, USGS estimate, approximately 69% of global total) |
| Refining/separation capacity | One pilot plant (started operation April 2025) | 91% of world refining output (IEA, 2024) |
| Permanent magnet production share | Zero | 94% of sintered NdFeB magnets (IEA, 2024) |
| Confirmed anomaly zone area | Approximately 7,000 square kilometers (central Iran) | Mining areas distributed nationwide (Inner Mongolia, Jiangxi, Sichuan, etc.) |
What this table shows is the reality that even though Iran is geologically promising, building an industrial chain requires enormous time and investment. The process of separating rare earth elements from ore is chemically extremely complex. Because the 17 elements are chemically very similar to each other, separating them one by one at high purity requires repeating solvent extraction hundreds of times. At present, no country other than China can stably operate this process at industrial scale.
The Logic by Which "Technology Blockade" and "Technology Sharing" Coexist
To understand China's rare earth strategy, one must trace back to the 1980s. In 1985, China introduced an export tax rebate system, supplying rare earth products to the world cheaply and driving out competitors such as the US Mountain Pass mine through price competition. Between 2002 and 2005, domestic rare earth prices in China fell to a historic low of about $5.50 per kilogram, forcing the closure of most overseas mines.
Afterward, China gradually strengthened export controls. It abolished the export tax rebate in 2005, introduced an export quota system in 2006, and drastically cut quotas in 2010, triggering a sharp international price surge. Even after the WTO ruled in 2014 that this export quota violated regulations, China maintained control through production quotas, environmental regulations, and industry restructuring.
Announcement No. 62 of 2025 is the latest version of this 40-year strategy. However, the current cooperation with Iran does not contradict this logic. What China prohibits is technology transfer to entities that could compete with it. Iran currently has no commercial production capacity and does not threaten China's market share. Rather, cultivating a new partner dependent on China's technological system works to strengthen China's position as a hub in the supply chain.
A report published in June 2026 by RUSI (Royal United Services Institute) clearly describes this structure. Even if other countries diversify their sources of rare earth raw ore, dependence on China continues at the stages of separation, metal refining, and magnet manufacturing. This is because investment in these processes is far more capital-intensive and technically difficult than mining.
Where the US's $3 Billion "De-China" Effort Currently Stands
In response to this structure, the United States is attempting to respond with massive investment. On August 7, 2026, President Trump held a roundtable with the mining industry at the State Department and announced federal investments totaling over $3 billion (approximately 440 billion yen). This includes a $1.4 billion conditional loan from the Department of Defense's Office of Strategic Capital (OSC) to Sila Nanotechnologies (expanding production of silicon carbon battery anodes), $150 million to Niron Magnetics (developing rare earth-free permanent magnets), and $400 million to Sunrise Energy Metals (building a full value chain for scandium).
The White House Fact Sheet explicitly states that these investments aim to "reduce dependence on hostile foreign nations and strengthen national security." According to CNBC reporting, replenishing weapons stockpiles depleted by the Iran conflict is also one motivation.
However, the fundamental problem facing US efforts is not funding but time and human resources. The industrial know-how for rare earth separation is something China accumulated over 40 years, and cannot be immediately replaced with an investment of a few hundred million dollars. China's continued restriction of technology exports since 2002 was precisely aimed at fixing this temporal advantage.
The Wall That Must Be Crossed From Academic Exchange to Industrial Transfer
The NSFC-INSF joint workshop is designed as one week of academic exchange. Eligibility requirements are also strict: Chinese applicants must be leading or participating in a National Natural Science Foundation project running for three years or more. As the call for proposals states, "合作交流应密切围绕所依托在研基金项目的研究内容" (Cooperative exchange should closely revolve around the research content of the ongoing foundation project it relies upon), it is positioned within a framework of basic research.
Iran also has its own independent developments. Researchers at Tehran University are reported to have developed separation technology independent of China's methods. Since the separation process generates thorium (low-level radioactive waste) as a byproduct, establishing technology to handle this has become one of the bottlenecks to industrialization.
As the Hague Research Institute's analysis points out, Iran's rare earth resources remain at a "promising but unconfirmed" stage. Whether the 7,000-square-kilometer anomaly zone converts into commercially mineable deposits depends on future detailed exploration. Even if deposits are confirmed, constructing separation and refining plants typically takes 5 to 10 years.
Whether what China provides to Iran remains limited to academic knowledge exchange, or develops into industrial-level technical cooperation in the future, remains to be seen. Many unverified processes still remain before the relationship that began with a 30,000-yuan workshop can redraw the map of the world's rare earth supply chain.