China warns against rare-earth overproduction

China stressed on Friday that rare earths and tungsten are products whose output is strictly controlled by the state, and no unit or individual may produce without or beyond planned production levels, the Ministry of Industry and Information Technology (MIIT) said in a notice on Friday.

According to the notice, in 2019, the national total control index for rare-earth mining and smelting separation was 132,000 tons and 127,000 tons, respectively.

The total amount of rare-earth mining and smelting and separation control indicators should be allocated to key enterprises with advanced technical equipment and high environmental protection levels to further increase the concentration of indicators, MIIT said.

“China will set the production quota every year, and that determines the total amount of rare earths the world will have, as China is the main producer of the strategic resource,” Wu Chenhui, an independent rare earths analyst, told the Global Times.

Wu noted that this year’s total quota is slightly higher than last year’s.

China dominates the global rareearth industrial chain and accounts for 80 percent of US imports of rare earths, according to data from the US Geological Survey.

Rare earths are considered as China’s leverage during the longstanding trade war between China and the US. The minerals are important for many modern technologies and the US military. So far, they have also been excluded from the list of

Chinese products on which the US has threatened to impose tariffs.

Industry representatives have urged further crackdowns on illegal mining and production, strengthened export management, and establishment of a traceability and review mechanism for rare-earth exports, which might lead to a drop in supply.

According to data from the General Administration of Customs, in the first half of the year, the total amount of rare earths that China has exported has reached 132,000 tons, a drop of 11.3 percent from the same period last year.