China Sets Record High Quotas for Rare Earth Mining

[Asia Economy Reporter Yujin Cho] China has increased its rare earth mining quota to an all-time high this year to ease supply chain constraints.

According to major foreign media on the 1st (local time), China's Ministry of Industry and Information Technology announced in a statement that the mining and smelting/separation quotas for rare earths this year have been set at 168,000 tons and 162,000 tons, respectively.

This represents about a 20% increase compared to last year's quota of 140,000 tons, marking the largest scale ever.

Additionally, the smelting and separation quota, which allows manufacturers to process rare earth minerals into usable forms, has also increased by 20% from 135,000 tons last year.

The Chinese authorities increased the mining quota as a measure to alleviate rare earth supply shortages and to strengthen their dominance in the global market against the United States.

Market information provider Wood Mackenzie evaluated that the quota increase is inevitable considering China's current supply situation and the rising demand from neodymium permanent magnet (NdFeB) manufacturers.

China is the largest producer of rare earths, which are key raw materials used in advanced industries such as electric vehicle batteries, electronics, and military equipment including fighter jets and missiles.

China has designated rare earths as strategic materials and has increased its market dominance amid US-China trade tensions. In response, the United States has also been striving to secure mining and refining facilities for complete domestic production of rare earths.

According to the US Geological Survey, China's share of global rare earth production was about 90% around 2016 but has decreased to approximately 58% as of last year due to increased production in the US and other countries.

China has relied on Myanmar for more than half of its demand for medium rare earths, but border trade restrictions due to concerns over the spread of COVID-19 have prevented the inflow of medium rare earths from Myanmar, which has also had an impact.

The rare earth mining quotas have been allocated to six state-owned enterprises, including Northern Rare Earth Group High-Tech, and there are suggestions that these companies might merge.

This content was produced with the assistance of AI translation services.