China hikes rare earth output quotas


    BEIJING – China hiked its rare earth output quotas for the first half of the year by more than 27 percent to record levels, potentially easing concerns of supply shortages after a spike in prices.

    China is the world’s dominant producer of rare earths, a group of 17 minerals used in electric vehicles (EVs), consumer electronics and military equipment.

    The rare earth mining output quota for the first half of 2021, to be shared among six major producers, has been set at 84,000 tons, a joint statement from China’s Ministry of Industry and Information Technology (MIIT) and the Ministry of Natural Resources said. That is up 27.2 percent from a year earlier.

    The total quota for rare earth smelting and separation – or the processing of ore into material used by manufacturers – has been set at 81,000 tons, up 27.6 percent from the first half of 2020.

    David Merriman, a manager at consultancy Roskill, said the allowances were China’s largest since half-year quotas were introduced.

    The increase “is likely a future-proofing exercise ahead of expected strong demand growth from EV applications in 2021 and into 2022, which will require significant volumes of (rare earths) in permanent magnets,” he said in an email.