EXCLUSIVE-China issues first batch of streamlined rare earth export licences, source says

Adds further details throughout

Dec 2 (Reuters) - China has issued the first batch of new rare earth export licences that should accelerate shipments to certain customers, a source said on Tuesday, fulfilling a key outcome of the summit between Presidents Donald Trump and Xi Jinping.

The approvals come after months of disruption triggered by China’s introduction of rare earth export controls in April at the height of the trade war.

By forcing companies to apply for licences for each export, Beijing created shortages that brought parts of the auto supply chain to a halt and handed it enormous leverage in trade talks with Washington.

The new "general licences" are designed to ease that pressure by allowing more exports under year-long permits for individual customers, Reuters reported exclusively in November, and were a key outcome of the Trump-Xi meeting in late October.

AUTO INDUSTRY SUPPLIERS

Chinese magnet maker JL Mag Rare Earth 300748.SZ has received general licences for nearly all of its clients, while Ningbo Yunsheng 600366.SS and Beijing Zhong Ke San Huan High-Tech 000970.SZ have secured licences for some of their clients, the source said, declining to be identified due to the sensitivity of the matter.

The three firms and China's Ministry of Commerce did not immediately respond to questions.

All three companies sell to the automotive industry among others, according to their websites. JL Mag has a subsidiary in Europe and Ningbo Yunsheng says it has clients in Europe and the Americas.

The new licences will supplement but not replace the existing licensing regime, Reuters reported in November. For now, only large Chinese rare earth companies are eligible for general licences, but the criteria could widen if the rollout proves successful, the source said.

QUESTIONS REMAIN

The new licences go some way to closing the gap between Beijing and Washington's respective accounts of what was agreed at the leaders' summit in South Korea.

While the White House likened general licences to the effective end of China's rare earth export controls, Beijing has said little about the new licences in public and given no sign it intends to dismantle its regime.

It remains to be seen how widely licences will be issued and whether they will be off limits for some customers, for example defence or sensitive sectors such as aerospace or semiconductors.

Meanwhile European firms on Monday complained again about long delays and a lack of transparency in the existing export control system.

(Reporting by Reuters staff; Editing by Sonali Paul, Michael Perry and Alex Richardson)