Identify hidden supply chain exposure before the suspended export controls return
China accounts for 91% of global refined magnet rare-earth output and 94% of sintered permanent-magnet production. Rare-earth permanent magnets and related materials are used in electric vehicle motors, wind turbines, medical equipment, industrial machinery, electronics and defence systems.
However, many companies cannot confidently determine whether products within their supply chains contain controlled Chinese-origin rare-earth materials or whether listed rare-earth items have been produced outside China using specified Chinese-origin rare-earth processing or manufacturing technology. This exposure rarely appears in a Tier 1 supplier list. It can sit several tiers deep, inside a magnet, alloy or component or within the process used to manufacture it.
Sphera’s Rare Earth & Critical Mineral Supply Chain Assessment helps companies investigate potential exposure across extended supply chains and prepare for the possible scheduled end of the suspension of China’s controls (MOFCOM Announcement No. 61) in November 2026.
What you need to know:
Two Chinese rare earth control regimes now need to be considered:
- April 2025 controls (Announcement No. 18 of 2025): These remain active and cover seven medium and heavy rare earth elements and related materials. The seven medium and heavy rare earth materials are: Samarium, Gadolinium, Terbium, Dysprosium, Lutetium, Scandium, Yttrium.
- October 2025 controls (Announcement No. 61 of 2025 and Announcement No. 62 of 2025): Announcement 61 introduced controls covering specified exports and re-exports from outside China. These include certain foreign-produced items in which listed Chinese-origin controlled items account for at least 0.1% of the foreign-produced item’s value, as well as listed items produced outside China using specified Chinese-origin rare-earth technology. Announcement 62 separately addressed exports and transfers of specified rare-earth technologies and related support.
Although the April controls are still in effect, the October measures are currently suspended under Announcement No. 70. The suspension is scheduled to run until 10 November 2026. Unless China extends, changes or withdraws the suspension, the affected measures could apply after that point. Companies should monitor further MOFCOM announcements rather than assume that the final scope or implementation date cannot change.
Should the suspension be lifted, this would leave companies with less than two months to identify exposure, close evidence gaps and develop practical mitigation plans before the measures are due to return. This remaining period gives companies an opportunity to investigate relevant supply chains, address evidence gaps and consider proportionate mitigation measures. Waiting until the suspension ends may leave limited time to obtain supplier documentation, assess license requirements, qualify alternatives, adjust contracts or establish appropriate inventory arrangements.
The risk may be deeper than your supplier map shows
Here’s the part that catches most companies off guard: a product does not need to be purchased directly from China to carry exposure. Chinese-origin rare earth materials can work their way into:
- Permanent magnets
- Motors and actuators
- Electronic assemblies
- Medical imaging equipment (including MRI systems)
- Industrial machinery
- Energy infrastructure
- Aerospace and defence components
The October regime adds a separate exposure pathway, one tied not to materials, but to process. Items produced using Chinese-origin mining, separation, refining, metal-processing, magnet-manufacturing or recycling technology can be caught by the controls even if the raw materials themselves came from somewhere else.
In other words, swapping suppliers or materials alone may not be enough to clear your exposure. You also have to look at how and where things were made.
Standard supplier mapping rarely captures this level of provenance. Establishing it can require coordinated investigation across suppliers, materials, manufacturing processes and supporting documentation.
From unanswered questions to a documented action plan
Sphera’s Rare Earth & Critical Mineral Supply Chain Assessment is a structured supplier assessment designed to establish exposure and support action. Using skip logic, suppliers answer only the questions relevant to their products and circumstances. Here’s how the assessment’s 8 modules can trace your exposure:
- Product and component scope: Identifies which products, components and materials may be relevant and captures how critical they are to the customer’s operations. This including the impact of a 60-day supply stoppage and whether a qualified alternative source exists. Suppliers with no applicable exposure route directly to the declaration in Module 8.
- Rare earth content screening: Determines which controlled elements may be present and their estimated value share against the 0.1% threshold.
- Origin, refining and evidence: Establishes where the material was mined and, separately, where it was separated and refined (often a different location), along with the documentation available to substantiate those answers.
- Traceability maturity: Rates current traceability on a defined scale, from knowing only the Tier 1 supplier through to a confirmed refinery of origin and sets a target date of September 30, 2026 to close any gap before the suspension is due to end.
- Technology exposure: Examines whether specified Chinese-origin production technology, expertise or personnel may have been used, providing an exposure pathway that is independent of material content.
- Licensing and continuity readiness: Reviews licensing status, expected processing times, destination markets, inventory buffers, alternative-supplier qualification status and contractual protections.
- Historical compliance: Examines the past three years for potential reclassification and transit-documentation issues, and the past 24 months for any government inquiries or enforcement actions, plus whether internal compliance audits have been conducted.
- Supplier declaration: Creates a dated, signed declaration, including a 30-day commitment to notify the customer of material changes, that can be retained as part of the organization’s evidentiary record.
Not just another risk score
Instead of an abstract red, amber or green rating, the assessment scores five separate dimensions and rolls the most urgent finding into a single overall priority:
- Exposure Risk: confirmed or probable presence of controlled Chinese-origin material or technology (Critical / High / Moderate / Low / Not in scope)
- Documentation Confidence: how well each answer is evidenced, independent of exposure level (Low / Moderate / High)
- Traceability Maturity: a five-level scale from Tier 1 known only through to mine and refinery confirmed
- Supply Continuity Risk: business criticality, inventory buffer and licensing lead time combined
- Historical Compliance Risk: retroactive exposure under China’s demonstrated customs review posture
This gives procurement, supply chain, operations and compliance teams a shared record of what was asked, what was found and what needs to happen next.
Start while there is still time to act
Tracing rare earth exposure across multiple supply chain tiers cannot be completed overnight. Neither can qualifying alternative suppliers, changing material specifications, negotiating new contractual provisions or building sufficient inventory buffers.
The suspension period is the opportunity to act, not a reason to wait.
** The assessment supports supply chain risk and compliance processes. It does not determine legal applicability, replace formal product classification or constitute legal advice.**
