Beijing asked South Korean companies not to ship products containing China's rare earth minerals to U.S. defence firms, the Korea Economic Daily reported.
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.
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.
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, Reuters reports.
Alex Shishlo, Editor in Chief of the European Bureau, Rough&Polished
