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China tightens grip on rare earth sector with silent quota release
Rare earth quotas issued without public notice
The quotas, which serve as a key indicator of global rare earth supply, were allocated last month without the customary statement from the government, Reuters reported. Companies involved were instructed not to disclose the figures due to 'security reasons". Rare earths—comprising 17 critical elements—are essential in the manufacture of electric vehicles, wind turbines, industrial robots, and military equipment such as missiles. China remains the largest global producer of these minerals and has traditionally issued mining and smelting quotas twice annually to state-owned firms. However, the release was delayed this year.
Over the past four years, China's Ministry of Industry and Information Technology has published the first batch of quotas in the first quarter via its official website. In 2023, the total mining quota was set at 270,000 metric tonnes, with supply growth slowing to 5.9 per cent, compared to 21.4 per cent the year prior. Beijing introduced the quota system in 2006 and has increasingly relied on it—along with industry consolidation—to exert tighter control.
India eyes incentive scheme for rare earth processing
As China tightens its hold, India is looking to scale up domestic production. A proposed plan by the central government aims to incentivise private sector firms to manufacture rare-earth magnets, with a reported incentive pool of $290 million. According to Bloomberg, major conglomerates such as Anil Agarwal's Vedanta Group, Sajjan Jindal's JSW Group, and EV parts manufacturer Sona BLW Precision Forgings Ltd have expressed early interest in the scheme.
Despite these restrictions, China's rare earth exports surged in June to their highest level since 2009. The sharp increase indicates a global rush to secure these vital materials. Exports—comprising rare earths in both mineral and metal forms—rose to 7,742 tonnes, marking a 60 per cent year-on-year increase.
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