China raises annual rare earth output quotas to record high

Fri, 2019-11-08 13:42

BEIJING: China lifted its annual rare earth output quotas on
Friday by 10% to record-high levels for 2019, potentially easing
fears the world’s dominant producer of the group of 17 prized
minerals will restrict supply.
Beijing in late May raised the prospect of weaponizing its control
of rare earths, used in everything from consumer electronics to
sophisticated military equipment, in its trade war with the United
States but has yet to announce any formal restrictions.
China is home to at least 85% of global rare earth processing
capacity, according to Adamas Intelligence.
The full-year rare earth mining quota has been set at 132,000 tons
for 2019 and the smelting and separation quota at 127,000 tons, the
Ministry of Industry and Information Technology said in a
The quotas, up from 120,000 tons and 115,000 tons, respectively, in
2018, are the “highest volume ever allocated” David Merriman, a
London-based manager at commodity research firm Roskill, said in an
China has now increased the allowances for two years in a row and
an official at the Association of China Rare Earth Industry
confirmed the numbers were record highs.
They imply a quota of 72,000 tons for mining in the second half of
2019, up more than 54% from an unusually low level a year
For smelting and separation, or the processing of ore into material
manufacturers can use, the second half quota is 69,500 tons.
The quota hikes could be seen as a message that China has “the
capability to increase supply, making life difficult for (rare
earths) under development in regions such as the Americas, EU and
Australia,” Roskill’s Merriman said.
But it likely “has much more to do with the domestic Chinese
supply-chain situation,” he added, noting that China had been
increasingly looking overseas for feedstock amid an environmental
crackdown at home.
The move will allow state-run miners and processors to “legally
maintain market share,” Merriman said.
China typically issues the rare earth quotas twice a year for
six-month periods. In March, the first-half quotas were set at
60,000 tons for mining and 57,500 tons for smelting and
The late release of the full-year quotas comes as Beijing and
Washington work to iron out the details on a so-called “phase
one” deal to end trade hostilities.
China’s rare earth exports in October rose by 1.9% from the
previous month to 3,639 tons, according to customs data released
earlier on Friday.

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Source: FS – All-News-Economy
China raises annual rare earth output quotas to record high