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Investing.com-- Chinese rare earths major Jl Mag Rare Earth Co Ltd (HK:6680) said on Wednesday that it had received government permits allowing it to export products to the U.S., Europe, and Southeast Asia.
The company said in a post on the Shenzhen stock exchange investor relations platform, Hudongyi, that it had applied for export permits after China in April announced a crackdown on rare earth material exports, as it engaged in a bitter trade war with the United States.
JL Mag, which manufacturers permanent rare earth magnets, announced the new permits just after China and the U.S. said they had agreed to a framework for trade, and planned to eventually scale back export curbs against each other.
U.S. officials said China will resolve its rare earth export curbs, while the U.S. will scale back some restrictions on chips and technology exports. But officials did not provide any concrete details on when the measures will be relaxed.
Still, JL Mag’s announcement indicates that rare earth exports from China will likely pick up in the coming weeks. The announcement also greatly boosted the rare earth firm’s shares.
JL Mag’s Hong Kong shares jumped 7.5% to HK$20.80, while its Shenzhen shares (SZ:300748) surged 10.4% to 24.62 yuan.
Other Chinese rare earth stocks also clocked strong gains, given that they are likely to resume exports to major international markets. China Rare Earth Holdings Ltd (HK:0769) rallied nearly 13% in Hong Kong trade, while China Northern Rare Earth Group High-Tech Co Ltd (SS:600111) rose nearly 4% in Shanghai trade.
On the other hand, rare earth stocks outside China, which stood to benefit from increased supply curbs, fell sharply on Wednesday. Australia’s Lynas (F:LYI) Rare Earths Ltd (ASX:LYC), the largest producer outside China, slid 7.5% to A$8.660 in Sydney trade.
China’s rare earth export curbs had spurred widespread concerns over tighter supplies of the key minerals across the globe, given the country’s dominant position in the refining of the minerals.
Rare earths are used across a variety of applications, ranging from components in defense equipment to everyday consumer electronics. While they are generally abundant in their availability, they are difficult to extract and refine without elaborate, dedicated equipment.