China raises annual rare earth mining quota to record high in 2020

BEIJING (Reuters) - China raised its mining quota for rare earth minerals by 6.1% in 2020 to a record annual high, the natural resources ministry said, in the effort to ramp up production of the prized minerals.

China is the world’s dominant producer of rare earths, a group of 17 minerals used in everything from consumer electronics to military equipment. The quotas are closely watched as a supply indicator and typically issued twice a year.

The full-year rare earth mining quota has been set at 140,000 tonnes for 2020, up from 132,000 last year and includes 120,850 tonnes of light rare earth ore and 19,150 tonnes of heavy rare earth ore, the Ministry of Natural Resources said in a notice on Wednesday.

That includes a 66,000 tonne quota granted for the first half of the year and implies a quota of 74,000 tonnes for mining in the second half of 2020, up from 72,000 tonnes the same period in 2019.

China has raised the annual quota for three years in a row.

In a separate statement on Thursday, the Ministry of Industry and Information Technology declared annual smelting and separation quotas for rare earths at 135,000 tonnes in 2020, including the first batch announced in early July.

Rare earths smelting and separation quotas are for the processing of ore into material useable by manufacturers. The 2019 quotas were 127,000 tonnes.

David Merriman, a London-based manager at consultancy Roskill, expected refined production of rare earths in China to account for 87% of global output in 2020, “with the official Chinese forecast to account for 83% of Chinese output.”

China exported 21,115 tonnes of rare earths in the January - June period, down 9.1% from a year earlier.

The ministry also set the tungsten concentrate mining quota at 105,000 tonnes in 2020, unchanged from last year. The metal is used to harden steel and make cutting tools.

Reporting by Min Zhang and Tom Daly in Beijing and Meg Shen in Hong Kong; Editing by Mark Heinrich and Richard Pullin