StrategicRawMaterial
All articles
Supplier due diligence

How to vet a rare earth or critical minerals supplier

Procurement and supply-chain buyers of rare earths and other critical raw materials, sourcing outside China.

By the StrategicRawMaterial team · · 14 min read

How do I vet a rare earth or critical minerals supplier?

Generic supplier checklists cover company registration, sanctions and financial health. For rare earth oxides, metals, alloys and magnets, five more checks matter:

  1. Export licence. Since 4 April 2025, Chinese exports of samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium (metal, alloys, oxides and compounds), samarium-cobalt magnets and NdFeB magnets containing terbium or dysprosium have needed a MOFCOM licence.[1] Ask whether your material is covered, and how the seller can show it was exported lawfully.
  2. Feed origin. Ask for the mine (or scrap source) and the separation plant by name, and check them against the producer's own filings.
  3. Separator or trader. Few companies outside China separate rare earths commercially. In its September 2026 quarterly report, Lynas described itself as "the only commercial scale producer of light and heavy rare earth oxides outside of China".[30] A trader should be able to say whose material it is selling.
  4. Grade and assay. Test a sample drawn under supervision at a lab you choose. A certificate of analysis proves little unless it can be tied to the lot.[3]
  5. Relationships you can verify. A firm offtake disclosed in an exchange filing is evidence.[4] A memorandum of understanding is not supply.[5]

What due diligence the law requires: the EU Conflict Minerals Regulation covers only tin, tantalum, tungsten and gold.[6] It does not cover rare earths, gallium, lithium or cobalt. Other laws or customer contracts may still require due diligence for those materials, so check which apply to you. The OECD's due diligence guidance is the common reference framework, and companies sourcing from conflict-affected and high-risk areas can use it for any mineral or metal.[7]

Check 1: Does the material need an export licence, and can the seller show it was exported lawfully?

As of 29 October 2026, exporters in China need a licence from the Ministry of Commerce (MOFCOM) for seven rare earths: samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium. This is Announcement No. 18 of 2025, in force since 4 April 2025. It covers each element's metal, alloys, sputtering targets, oxides and compounds, plus samarium-cobalt magnets and NdFeB magnets that contain terbium or dysprosium.[1] Controls on five more (holmium, erbium, thulium, europium and ytterbium) are suspended until 10 November 2026.[33][8] On 28 September 2026, MOFCOM said the two sides would keep talking on the basis of extending the wider China–US trade arrangement to 10 January 2027. That statement does not mention rare earths, and as of 29 October MOFCOM had published no announcement changing the 10 November date.[31][32]

What to ask a seller exporting from China

  • Which licence covers this shipment, and for which end user? The licence application needs end-user and end-use certificates issued by the end user.[9] If you are the end user, expect to be asked to sign them.
  • What have you committed to? Under Article 24 of China's Dual-Use Items Export Control Regulations, the end user, when MOFCOM requires it, commits not to change the end use, or pass the items to any third party, without MOFCOM's permission.[9]
  • How long will it take? MOFCOM's review period is 45 working days from accepting an application, not counting time for identification, expert consultation or on-site checks (Article 17).[9]
  • Can the exporter document it? Exporters must keep end-user certificates and related records for at least five years (Article 27).[9]

The ore's origin does not change this. No. 18 controls items by type, not by where the feed was mined, so a listed item exported from China needs a licence whatever ore it came from. This is our reading of No. 18.[1]

Controlled material offered from outside China

Since 1 July 2026, MOFCOM's reporting rules (Announcement No. 26 of 2026) list routing items through third countries to evade the controls, and helping importers or end users evade controls, among 13 reportable violations.[10]

Our reading, not a MOFCOM statement: a stockist outside China offering Chinese-origin samarium, gadolinium, terbium, dysprosium, lutetium, scandium or yttrium items is not suspect in itself. Material exported from China before 4 April 2025 needed no licence under No. 18 and carries no end-user commitment.[1] The red flag is a seller who can show neither the licence chain back to the Chinese exporter, nor an export date before 4 April 2025 (for example, from export customs records). Material exported under a licence and resold without MOFCOM's permission may breach the original end user's commitment.[9][10]

Gallium, cobalt and defence magnets

  • Gallium: exports from China have needed a MOFCOM licence since 1 August 2023.[11] Since 3 December 2024, MOFCOM has said gallium exports to the US would "in principle" not be licensed;[34] that clause is suspended until 27 November 2026.[35]
  • Cobalt from the Democratic Republic of the Congo: the DRC suspended cobalt exports, then moved to a quota system from 16 October 2025. As of May 2026, the 2026 quota was 96,600 tonnes (87,000 tonnes base plus a 9,600-tonne strategic quota), allocated by the regulator ARECOMS.[12] For DRC-origin material, ask how the export fits within the quota.
  • Magnets for US defence contracts: DFARS 252.225-7052 covers samarium-cobalt and NdFeB magnets. From 1 January 2027, contractors may not deliver covered magnets "mined, refined, separated, melted, or produced" in China, Russia, North Korea or Iran. Recycled NdFeB magnets milled and sintered in the US are an exception.[13] For those buyers, feed origin becomes a contract requirement.

Check 2: Where does the feed come from?

Ask for two names: the mine (or scrap source) and the separation plant. Then check both against the producer's own filings. Producers outside China disclose their feed:

  • Lynas processes concentrate from its Mt Weld mine at Kalgoorlie, Western Australia, and at its plant in Kuantan, Malaysia.[2]
  • As of August 2025, Energy Fuels bought monazite from Chemours mines in Florida and Georgia for its White Mesa Mill in Utah.[5]
  • MP Materials reports NdPr oxide produced at Mountain Pass, California.[14]

Heavy rare earths and Myanmar

According to Global Witness, China's imports of heavy rare earth oxides from Myanmar rose from 19,500 tonnes in 2021 to 41,700 tonnes in 2023. In May 2024, Global Witness called Myanmar "the single largest source of heavy rare earth elements globally". It reported that the number of mining sites in Kachin Special Region 1 has increased by more than 40%, in an area controlled by militias aligned with Myanmar's military government.[15]

The OECD's red flags include minerals declared to originate in a country through which minerals from conflict-affected or high-risk areas are known or reasonably suspected to pass.[16] Our inference: because Myanmar feed is known to enter China for processing, Chinese-separated dysprosium and terbium can trigger that red flag, and so can "recycled" heavy rare earths refined in China. That calls for enhanced due diligence on origin, not an automatic refusal.

What a separator can show

ISO 23664:2021, "Traceability of rare earths in the supply chain from mine to separated products", specifies the information supply chain businesses should record.[17] Ask a separator whether it records to this standard. We found no public list of companies certified to it.

Check 3: Does the seller separate the material, or only trade it?

As of 29 October 2026, six companies have public evidence that they make or supply NdPr oxide outside China, and the evidence differs. Lynas and Energy Fuels describe commercial-scale production,[2][18] and MP Materials reports NdPr oxide output (840 tonnes in the second quarter of 2026).[14] Solvay began commercial production of rare earths for magnets in April 2025 and has announced NdPr oxide supply to Noveon from 2026.[19][22] IREL in India lists NdPr oxide as a product,[20] and the latest statement we found by Neo Performance Materials naming it as a product of its Estonian plant dates from March 2022.[21]

With so few separators, a trader should be able to say whose oxide it is selling. A seller that claims "our refinery" should be able to name it, and you can check the claim against that company's filings. For metals and alloys, ask whose oxide went into the metal.

A volume test for dysprosium and terbium

One OECD red flag is a declared volume from a country out of proportion to its known reserves or expected production.[16] Our adaptation applies the same test to a separator's output. For heavy rare earths outside China, the numbers are small enough to check:

  • Lynas produced 23 tonnes of dysprosium and terbium ready for sale in the September 2026 quarter, reported on 29 October. Lynas's quarterly heavy rare earth output moves a lot: 9, 26, 8, 19 and 23 tonnes across the five quarters from July 2025 to September 2026. Lynas expects lower production overall in the December quarter, when its Malaysian plant shuts for about a month of planned maintenance.[30]
  • Under its agreement of 10 March 2026 with Japan Australia Rare Earths (JARE), 75% of Lynas's heavy rare earth oxides are "made available to Japanese industry", and JARE has a firm commitment to buy the equivalent of 50%.[4]
  • Our calculation: on September-quarter volumes, about 6 to 11.5 tonnes a quarter of Lynas dysprosium and terbium is not committed to Japan. That is 25% of 23 tonnes if Japanese industry takes everything made available to it, and 50% if it takes only the firm share. It assumes the JARE shares, which apply to all of Lynas's heavy rare earth oxides, hold for dysprosium and terbium alone.[30][4] Lynas may have other buyers for it, so this is a range for what is not committed to Japan, not a measure of what is for sale.
  • Solvay announced on 12 November 2025 that it will supply NdPr, dysprosium and terbium oxides to the US magnet maker Noveon from 2026, partly from end-of-life materials. The announcement gives no volume and does not say where the dysprosium and terbium are separated.[22] In July 2026, Solvay said it would begin industrial-scale dysprosium and terbium separation in autumn 2026;[36] we found no announcement of the start as of 29 October 2026. At least part of that supply is for a named buyer.
  • As of 29 July 2026, Energy Fuels' commercial dysprosium and terbium circuits were under construction, with commissioning expected in the fourth quarter of 2027.[23]

So an offer of tens of tonnes of non-Chinese dysprosium or terbium oxide for prompt delivery has to name its separator. If it cannot, treat the origin claim as unproven.

Check 4: How do I verify grade and assay claims?

Know what the purity figure measures

Rare earth purity is usually stated on a rare earth oxide (REO) basis: the share of the target oxide in the total rare earth oxides, not in the whole sample. IREL's NdPr oxide specification, for example, reads "99.9% purity on REO basis", with Nd2O3 at 70–85% and Pr6O11 at 15–30%.[20]

Ask for all of these on the certificate: TREO, the target oxide as a share of TREO, the other rare earths in ppm, and the non-rare-earth impurities (such as iron, silicon and calcium oxides, chloride, and loss on ignition).

Oxide and metal are not comparable per kilogram. MP Materials, for example, counts its NdPr metal sales as oxide equivalent at a factor of 1.25.[14] Check whether a metal offer is quoted per kilogram of metal or of REO.

An example from another metal: nickel

In January 2026, the English High Court gave judgment in a fraud case brought by the commodity trader Trafigura. Trafigura had bought containers described as nickel on bills of lading, invoices and insurance certificates.[3] The court found that Trafigura was the victim of fraud and that the containers held low-value metal or worthless material. Where certificates of analysis were supplied, they falsely showed pure nickel, and a certificate could not be linked to a cargo without inspecting it. The customs (HS) codes on the documents did not record nickel.[3] Nickel is not a rare earth, but our lesson from the case carries over: compare the HS code, the certificate's lot number and the marks on the drums or bags, and inspect.

Independent testing

Our practice suggestions, not legal requirements:

  • have the sample drawn under the supervision of an inspector you appoint;
  • split and seal samples, with one kept for the seller and one in reserve;
  • use a lab you choose;
  • match lot numbers on the certificate to the packaging marks;
  • put an umpire clause in the contract, naming the lab that settles a dispute.

Qualification is a separate step. Magnet makers qualify a new source before using it commercially. Energy Fuels announced on 19 August 2026 that a large Japanese magnet maker had qualified its terbium oxide.[24] A seller that says its material is "qualified by" a customer should be able to show it.

Check 5: Which supplier relationships can I verify?

Claims about offtakes, government awards and partners are easy to make and easy to check, if you know where to look.

  • A firm offtake, disclosed in a filing. Lynas's ASX announcement of 10 March 2026 sets out its JARE agreement: a firm offtake of 5,000 tonnes a year of NdPr, 75% of its heavy rare earth oxides made available to Japanese industry with a firm commitment for 50%, and a floor price of US$110/kg for NdPr, running to 2038.[4]
  • A memorandum of understanding. Energy Fuels and Vulcan Elements announced an MOU on 26 August 2025.[5] An MOU states intent. It is not a supply contract.

Where to check: for listed companies, the exchange's announcement platform (such as the ASX) or the SEC's EDGAR database; for government awards, the awarding agency's own release. A claim that appears only in the seller's own deck, or in a news story that cites no filing, is a lead to follow up, not evidence.

What is OECD due diligence for minerals?

OECD due diligence for minerals means following the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. The Guidance was first adopted in May 2011. The OECD says it is meant for any company that sources, or may source, minerals from conflict-affected and high-risk areas.[7]

The guidance sets out five steps:[25]

  1. Establish strong company management systems.
  2. Identify and assess risk in the supply chain.
  3. Design and implement a strategy to respond to identified risks.
  4. Carry out an independent third-party audit of supply chain due diligence at identified points in the supply chain.
  5. Report on supply chain due diligence.

Its model supply chain policy covers serious abuses linked to extraction, transport or trade; direct or indirect support to non-state armed groups; public or private security forces; bribery and fraudulent misrepresentation of the origin of minerals; money laundering; and payment of taxes, fees and royalties.[25]

Does it cover rare earths? The guidance has supplements only for tin, tantalum, tungsten and gold. The Recommendation says supplements for other minerals "may be added".[25] The five-step framework itself is not limited to those four, so buyers of rare earths, gallium, lithium and cobalt can apply it.[7]

Chain of custody and traceability are different things. The OECD describes chain of custody as the document trail, such as production records, bills of lading and export certificates. Traceability is physically tracking the minerals from mine to refiner.[16] For rare earths, ISO 23664 sets out what to record from mine to separated product.[17]

Law and guidance. In the EU, the Conflict Minerals Regulation (2017/821) makes OECD-based due diligence mandatory only for Union importers of tin, tantalum, tungsten and gold.[6] For rare earths, gallium, lithium and cobalt, our reading is that the OECD guidance is voluntary unless a customer contract or another law requires it.

What are the red flags when buying critical minerals from a new supplier?

The OECD groups its red flags in three sets:[16]

  • Origin and transit: the minerals come from, or passed through, a conflict-affected or high-risk area; the declared origin country has limited known reserves or production for the volumes declared; the declared origin is a country known or reasonably suspected to be a transit route for minerals from such areas; or the minerals are declared as recycled, scrap or mixed and were refined in such a country.
  • Supplier: the supplier operates in, or has interests in suppliers in, a red-flag location, or is known to have sourced from one in the last 12 months.
  • Circumstances: anomalies in the information collected that make it reasonable to suspect links to conflict, serious abuses, bribery or financial crime.

For rare earths, these are the red flags we would act on:

  1. Heavy rare earths with no named separator. In May 2024, Global Witness called Myanmar the single largest source of heavy rare earths, and reported rising Chinese imports from it.[15]
  2. Volumes above known output. Lynas, the only producer outside China we found that reports dysprosium and terbium output each quarter, produced 23 tonnes ready for sale in the September 2026 quarter.[30] An offer of tens of tonnes for prompt delivery needs a named separator.
  3. Chinese-origin controlled items from a stockist outside China with neither a licence chain nor an export date before 4 April 2025. This is our reading of China's rules.[1][9][10]
  4. Documents that do not match the goods: an HS code, certificate lot number or packaging mark that does not match, or a certificate of analysis that cannot be tied to the lot. This is our advice, drawn from the nickel case.[3]
  5. A counterparty on a restricted list. Screen the seller, its owners and the end user against the US Consolidated Screening List, which combines Commerce, State and Treasury lists in one search.[26] For Chinese-origin dual-use items, also check MOFCOM's control list: as of 29 October 2026 it includes MP Materials and USA Rare Earth, both listed on 22 June 2026, and Chinese-origin dual-use items may not be passed to listed entities.[27][9]
  6. An MOU presented as an offtake, or a relationship that appears in no filing.

What a verified marketplace checks for you, and what it doesn't

Our buyer guide and seller guide, both dated 26 September 2026, describe these checks:[28][29]

  • Companies: every buyer and seller passes KYC/KYB before bidding or posting, covering personal identity, company registration documents, and sanctions and PEP screening.[28][29]
  • Material: an offer goes live only after the material has been verified. Depending on the material and its origin, the audit "can include" facility documentation and video inspection, a laboratory assay confirming the stated grade, a certificate of origin and chain of custody, and customs and regulatory compliance checks.[28][29]
  • At a match: offers are anonymous until a match, and identities are revealed only to the matched counterparty. The winning buyer may pay a compliance package unlock fee per tonne.[28] A non-circumvention agreement is generated, the contract is made directly between the two parties, and the platform is not in the payment flow.[29]

So every company is screened against sanctions lists, and the material audit can include a certificate of origin and chain-of-custody review and a laboratory assay. The guides do not say whether the material verification covers export-licence status, so ask for the licence chain yourself, and confirm whose material it is and which of the seller's relationships are on record.

Request access to trade rare earths and critical raw materials with companies that have passed KYC/KYB checks.

Sources

  1. MOFCOM and GAC, Announcement No. 18 of 2025, export controls on some medium and heavy rare earth items, 4 April 2025. mofcom.gov.cn (opens in a new tab)
  2. Lynas Rare Earths, Quarterly Activities Report for the period ended 30 June 2026, filed 22 July 2026. asx.com.au (opens in a new tab)
  3. Trafigura Pte Ltd & Anor v Gupta & Ors [2026] EWHC 159 (Comm), High Court of England and Wales, 30 January 2026, paras 1, 3, 100, 134–135 and 363. caselaw.nationalarchives.gov.uk (opens in a new tab)
  4. Lynas Rare Earths, "Enhanced JARE agreement for Japanese industry", ASX announcement, 10 March 2026. asx.com.au (opens in a new tab)
  5. Energy Fuels, "Energy Fuels and Vulcan Elements Join Forces to Advance U.S. Rare Earth Magnet Security", 26 August 2025. energyfuels.com (opens in a new tab)
  6. Regulation (EU) 2017/821 (Conflict Minerals Regulation), Articles 1 and 2. legislation.gov.uk (opens in a new tab)
  7. OECD, Monitoring and Evaluation Framework for the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals, 2022 edition, pp. 15–16. oecd.org (opens in a new tab)
  8. MOFCOM and GAC, Announcement No. 70 of 2025, suspension of Announcements Nos. 55–58, 61 and 62, 7 November 2025. mofcom.gov.cn (opens in a new tab)
  9. State Council, Dual-Use Items Export Control Regulations (Order No. 792), in force 1 December 2024, Articles 16, 17, 24, 27 and 29. mofcom.gov.cn (opens in a new tab)
  10. Xinhua, report of MOFCOM Announcement No. 26 of 2026 on reporting export control violations, 24 June 2026, in force 1 July 2026. news.cn (opens in a new tab)
  11. MOFCOM and GAC, Announcement No. 23 of 2023, export controls on gallium and germanium items, in force 1 August 2023. mofcom.gov.cn (opens in a new tab)
  12. IEA Policies Database, "DRC ARECOMS Decision No. 004/2025 – Cobalt Quota System", updated 28 May 2026. iea.org (opens in a new tab)
  13. DFARS 252.225-7052, Restriction on Acquisition of Certain Magnets, Tantalum, and Tungsten (May 2024). acquisition.gov (opens in a new tab)
  14. MP Materials, "MP Materials Reports Second Quarter 2026 Results", 6 August 2026. mpmaterials.com (opens in a new tab)
  15. Global Witness, press release on heavy rare earth mining in Myanmar, 23 May 2024. globalwitness.org (opens in a new tab)
  16. OECD, "An introduction to the OECD Due Diligence Guidance for upstream actors", p. 6 (red flags; chain of custody and traceability). oecd.org (opens in a new tab)
  17. BSI, BS ISO 23664:2021, "Traceability of rare earths in the supply chain from mine to separated products" (scope). bsigroup.com (opens in a new tab)
  18. Energy Fuels, Form 10-Q for the quarter ended 30 June 2026. sec.gov (opens in a new tab)
  19. Solvay, "Solvay advances European rare earths production through capacity expansion", 8 April 2025. solvay.com (opens in a new tab)
  20. IREL (India) Limited, Rare Earths product page. irel.co.in (opens in a new tab)
  21. Neo Performance Materials, "Rare earth processing plant earns gold medal", 28 March 2022. neomaterials.com (opens in a new tab)
  22. Solvay, "Noveon and Solvay forge partnership for light and heavy rare earth materials supply", 12 November 2025. solvay.com (opens in a new tab)
  23. Energy Fuels, "Commercial-Scale 'Heavy' Rare Earth Plant Now Under Construction in Utah", 29 July 2026. energyfuels.com (opens in a new tab)
  24. Energy Fuels, "'Heavy' Rare Earths Produced by Energy Fuels Qualified for Use by Largest Permanent Magnet Manufacturer in Japan", 19 August 2026. energyfuels.com (opens in a new tab)
  25. OECD, Recommendation of the Council on Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (OECD/LEGAL/0386), Annexes I and II. legalinstruments.oecd.org (opens in a new tab)
  26. US International Trade Administration, Consolidated Screening List. trade.gov (opens in a new tab)
  27. MOFCOM, Announcement No. 23 of 2026, ten US entities added to the export control list, 22 June 2026. mofcom.gov.cn (opens in a new tab)
  28. strategicrawmaterial.com, buyer onboarding guide, 26 September 2026. /blog/buyer-onboarding
  29. strategicrawmaterial.com, seller onboarding guide, 26 September 2026. /blog/seller-onboarding
  30. Lynas Rare Earths, Quarterly Report for the period ended 30 September 2026, filed 29 October 2026. ASX filing (opens in a new tab)
  31. Xinhua, repost of MOFCOM's Department of American and Oceanian Affairs on the eighth round of China–US trade talks, 28 September 2026, giving MOFCOM's website as its source. news.cn (opens in a new tab)
  32. MOFCOM, list of 2026 announcements, checked 29 October 2026. mofcom.gov.cn (opens in a new tab)
  33. MOFCOM and GAC, Announcement No. 57 of 2025, export controls on some medium and heavy rare earth items, 9 October 2025. mofcom.gov.cn (opens in a new tab)
  34. MOFCOM, Announcement No. 46 of 2024, strengthening export controls on dual-use items to the United States, 3 December 2024. mofcom.gov.cn (opens in a new tab)
  35. MOFCOM, Announcement No. 72 of 2025, adjusting the implementation of Announcement No. 46 of 2024, 9 November 2025. mofcom.gov.cn (opens in a new tab)
  36. Solvay, Q2 2026 earnings release, 29 July 2026. solvay.com (opens in a new tab)