China asks Korea not to supply products using rare earths to U.S. defence firms, paper reports

The report had initially said China's Ministry of Commerce warned Korean companies they could face sanctions if they violated the export restrictions. The ministry delivered the message in letters to Korean companies which make power transformers, batteries, displays, electric vehicles, aerospace and medical equipment, the report said.

The Korea Economic Daily report was later corrected to the "Chinese government" delivering the message, rather than the commerce ministry.

South Korea's industry ministry said on Wednesday it was checking with the Chinese government and South Korean companies in order to confirm the report.

"So far, it has not been confirmed that South Korean companies have received an official letter from the Chinese government as per the report," the ministry said.

China's Ministry of Commerce did not respond to questions.

Early this month, China placed export restrictions on rare earth elements as part of its sweeping response to U.S. tariffs, restricting the supply of minerals used to make weapons, electronics and a range of consumer goods.

Exporters must now apply to the Ministry of Commerce for licences, a relatively opaque process that can range from six or seven weeks to several months.

China produces around 90% of the world's rare earths, a group of 17 elements. The U.S. government has stockpiles of some rare earths, but not enough to supply its defence contractors in perpetuity.

South Korea said in early April it had more than six months of stockpiles of some of the seven rare earths restricted by China, including dysprosium, used in special magnets found in the clean energy sector, including electric vehicles and wind turbines.

Senior South Korean government officials are set to meet their U.S. counterparts in Washington on Thursday to discuss tariffs.