The answer left everyone unthinking that after China's embargo on key rare lands in the United States, a huge smuggling network appeared, and these people's smuggling methods were unavoidable, in just a few months, a large number of rare lands flowed to the United States, until multiple accurate interception operations discovered this vulnerability, and the intelligence provider was actually American companies.
At the end of 2024, after China strengthened the key rare-earth embargo on the United States, in a few months there will be 3,834 tons of strategic rare-earth flow through illegal channels to the United States, the amount of the case exceeds $ 800 million, these rare-earth few eventually entered U.S. military-industrial enterprises, used to make F-35 fighter jets and missiles.
The smuggling gangs hide their methods deeply. The Ministry of National Security previously disclosed that some people mixed high-purity rare earth powder into ceramic tile raw materials, and others poured it into the abdominal cavity of plastic models and packed it in mineral water bottles. They called it "building materials accessories" and "decorations" during customs declaration.
Even through dissolution and nano-grinding, the form was changed, and the index was forged to declare 10,000 yuan per kilogram of terbium and dysprosium as a ferroalloy of hundreds of yuan, and then the packaging was changed in Thailand and Vietnam to make a "non-Chinese origin" certificate for transfer.
Just as this loophole was about to expand, multiple precise interception operations found a breakthrough. 68% of the smuggling intelligence came from anonymous reports from American companies.
China must maintain resource security, American companies must protect market interests, and smuggling gangs want to make dirty money. Under the tussle of all parties, the problems exposed by this rare earth smuggling case are far more complex than imagined.
Can you think that the key force to help China block the back door of rare earth is American companies?
China's embargo policy on rare earths is actually tightening the cage step by step. At the end of 2023, rare earth extraction and separation technology will be listed in the prohibited export catalog, cutting off the way for independent processing by other countries.
In July 2024, export licenses will be implemented for seven rare earths including samarium and gadolinium. In April 2025, another five elements including holmium and erbium will be added, and the scope of control will be expanded to 12 key items.
By October 2025, the new rules will be more thorough, and even if China's rare-earth production is transferred to a third country, it will still require China's permission to completely block the "exit out of control" vacuum.
This series of upgrades is not only for the neck of the United States, but more importantly to ensure strategic security, before Lockheed Martin, Raytheon and these US military-industrial enterprises, have been investigated for the smuggling of rare earth, and this illegal flow has been clearly curbed after the upgrading of the embargo.
It is also good for domestic industries, forcing compliance companies to shift from selling raw materials to making high-end magnetic materials. In 2025, these companies will account for more than 60% of their high-end products, and they will no longer make money by selling resources at low prices.
In the face of smuggling chaos, China's response does not rely solely on blocking. In May 2025, seven departments including the Ministry of Commerce, the Ministry of National Security, and the General Administration of Customs jointly launched the "Special Action to Combat the Smuggling and Export of Strategic Minerals." So far, more than US$80 million worth of disguised rare earth goods have been intercepted.
The newly revised Mineral Resources Law stipulates that smuggling of small amounts can be sentenced to a maximum of 10 years, cases worth more than 5 million according to national security offences, fines can be 10 times the volume of sales, and the main offenders can no longer engage in this industry for a lifetime.
Technically, hard work has been made to implant nano-electronic tags into rare earths, and use blockchain to record the entire process of origin, smelting, and transportation, so that it can be checked at any time "one gram, one code".
The customs AI system can identify the abnormal declaration for 5 seconds, the post office small piece detector can directly distinguish the powder composition, and special equipment can capture the rare earth-specific gamma-ray characteristics, it is increasingly difficult to disguise.
The international community is not idle either. It has opened up customs data with transit countries such as Thailand and Vietnam, and can provide real-time warnings whenever there is an abnormal flow of goods. It has also issued guidelines for the compliance export of strategic minerals, including overseas users who want to evade controls. Blacklist, verify procurements for military purposes from the source.
U.S. companies report the smuggling of this, looking abnormally in fact is all profit calculation.
After the embargo, the price of formal rare earths rose from US$10,000/ton to US$15,000/ton, but smuggled goods were dumped at half price, seizing more than 40% of the market share of compliant companies.
Like MP Materials Company, the inventory is piled up and cannot be sold, and the business is almost unable to hold on; There is also Gamma Corporation, which relies on anonymously reporting competitors' smuggling. Not only did it push the other party out of the market, but its share also rose by 25%, and its stock price soared by 18% in one day.
The role of the United States in the entire smuggling chain is more complex and is the largest demander. 90% of refined rare earths depend on China. The rigid demand of the military industry and new energy industry has become the core driving force for smuggling. From 2024 to 2025 The volume of smuggling is almost equivalent to the annual output of two medium-sized mines in the United States.
Also on the domestic enterprises to purchase smuggling rare earth "open an eye and close an eye", knowing that many smuggling rare earth flow to the military industry, but without the strength of the supervision, even the implicit transition of the country to the washing of white operation, formed the supervision of the gray zone.
This attitude of "wishing but not regulating" is actually to both enjoy the convenience of China's rare land and not want to be constrained by China's policies.
Rare earth is not only the "industrial gold" excavated in the ground, but also the bottom line of national resource security, China from the blocking of smuggling vulnerabilities to upgrading the embargo policy, from technology supervision to rules export, every step is in the safeguarding of core interests, but also in the restructuring of the global high-end industrial chain pattern.
There are no eternal allies in this game, only eternal interests, and what China has to do is firmly hold the initiative in its own hands.
After all this, we think that the smuggling gang may come up with what more hidden smuggling methods, and how should China be prepared in advance?
U.S. while rushing to find rare-earth sources outside of China, while there are companies because of smuggling reporting peers, this kind of self-decommissioning situation, do you think will affect their rare-earth replacement plans?
At the end of 2024, after China strengthened the key rare-earth embargo on the United States, in a few months there will be 3,834 tons of strategic rare-earth flow through illegal channels to the United States, the amount of the case exceeds $ 800 million, these rare-earth few eventually entered U.S. military-industrial enterprises, used to make F-35 fighter jets and missiles.
The smuggling gangs hide their methods deeply. The Ministry of National Security previously disclosed that some people mixed high-purity rare earth powder into ceramic tile raw materials, and others poured it into the abdominal cavity of plastic models and packed it in mineral water bottles. They called it "building materials accessories" and "decorations" during customs declaration.
Even through dissolution and nano-grinding, the form was changed, and the index was forged to declare 10,000 yuan per kilogram of terbium and dysprosium as a ferroalloy of hundreds of yuan, and then the packaging was changed in Thailand and Vietnam to make a "non-Chinese origin" certificate for transfer.
Just as this loophole was about to expand, multiple precise interception operations found a breakthrough. 68% of the smuggling intelligence came from anonymous reports from American companies.
China must maintain resource security, American companies must protect market interests, and smuggling gangs want to make dirty money. Under the tussle of all parties, the problems exposed by this rare earth smuggling case are far more complex than imagined.
Can you think that the key force to help China block the back door of rare earth is American companies?
China's embargo policy on rare earths is actually tightening the cage step by step. At the end of 2023, rare earth extraction and separation technology will be listed in the prohibited export catalog, cutting off the way for independent processing by other countries.
In July 2024, export licenses will be implemented for seven rare earths including samarium and gadolinium. In April 2025, another five elements including holmium and erbium will be added, and the scope of control will be expanded to 12 key items.
By October 2025, the new rules will be more thorough, and even if China's rare-earth production is transferred to a third country, it will still require China's permission to completely block the "exit out of control" vacuum.
This series of upgrades is not only for the neck of the United States, but more importantly to ensure strategic security, before Lockheed Martin, Raytheon and these US military-industrial enterprises, have been investigated for the smuggling of rare earth, and this illegal flow has been clearly curbed after the upgrading of the embargo.
It is also good for domestic industries, forcing compliance companies to shift from selling raw materials to making high-end magnetic materials. In 2025, these companies will account for more than 60% of their high-end products, and they will no longer make money by selling resources at low prices.
In the face of smuggling chaos, China's response does not rely solely on blocking. In May 2025, seven departments including the Ministry of Commerce, the Ministry of National Security, and the General Administration of Customs jointly launched the "Special Action to Combat the Smuggling and Export of Strategic Minerals." So far, more than US$80 million worth of disguised rare earth goods have been intercepted.
The newly revised Mineral Resources Law stipulates that smuggling of small amounts can be sentenced to a maximum of 10 years, cases worth more than 5 million according to national security offences, fines can be 10 times the volume of sales, and the main offenders can no longer engage in this industry for a lifetime.
Technically, hard work has been made to implant nano-electronic tags into rare earths, and use blockchain to record the entire process of origin, smelting, and transportation, so that it can be checked at any time "one gram, one code".
The customs AI system can identify the abnormal declaration for 5 seconds, the post office small piece detector can directly distinguish the powder composition, and special equipment can capture the rare earth-specific gamma-ray characteristics, it is increasingly difficult to disguise.
The international community is not idle either. It has opened up customs data with transit countries such as Thailand and Vietnam, and can provide real-time warnings whenever there is an abnormal flow of goods. It has also issued guidelines for the compliance export of strategic minerals, including overseas users who want to evade controls. Blacklist, verify procurements for military purposes from the source.
U.S. companies report the smuggling of this, looking abnormally in fact is all profit calculation.
After the embargo, the price of formal rare earths rose from US$10,000/ton to US$15,000/ton, but smuggled goods were dumped at half price, seizing more than 40% of the market share of compliant companies.
Like MP Materials Company, the inventory is piled up and cannot be sold, and the business is almost unable to hold on; There is also Gamma Corporation, which relies on anonymously reporting competitors' smuggling. Not only did it push the other party out of the market, but its share also rose by 25%, and its stock price soared by 18% in one day.
The role of the United States in the entire smuggling chain is more complex and is the largest demander. 90% of refined rare earths depend on China. The rigid demand of the military industry and new energy industry has become the core driving force for smuggling. From 2024 to 2025 The volume of smuggling is almost equivalent to the annual output of two medium-sized mines in the United States.
Also on the domestic enterprises to purchase smuggling rare earth "open an eye and close an eye", knowing that many smuggling rare earth flow to the military industry, but without the strength of the supervision, even the implicit transition of the country to the washing of white operation, formed the supervision of the gray zone.
This attitude of "wishing but not regulating" is actually to both enjoy the convenience of China's rare land and not want to be constrained by China's policies.
Rare earth is not only the "industrial gold" excavated in the ground, but also the bottom line of national resource security, China from the blocking of smuggling vulnerabilities to upgrading the embargo policy, from technology supervision to rules export, every step is in the safeguarding of core interests, but also in the restructuring of the global high-end industrial chain pattern.
There are no eternal allies in this game, only eternal interests, and what China has to do is firmly hold the initiative in its own hands.
After all this, we think that the smuggling gang may come up with what more hidden smuggling methods, and how should China be prepared in advance?
U.S. while rushing to find rare-earth sources outside of China, while there are companies because of smuggling reporting peers, this kind of self-decommissioning situation, do you think will affect their rare-earth replacement plans?