China sets rare earth output quota for 2011

April 1, 2011 (Source: — China has set its total output of rare earth at 93,800 tonnes this year, 4,600 tonnes more or 5.16 percent higher compared to last year’s, the Ministry of Land and Resources announced Thursday.

China will not grant any new licenses for rare earths prospecting and mining before June 30, 2012, said a statement on the ministry’s website.

According to the statement, total output of light rare earths is set at 80,400 tonnes and that of medium and heavy rare earths at 13,400 tonnes this year.

China adopted the output quota system for rare earth in 2007, in a bid to to balance environmental protection needs and industrial demands. China is the world’s largest rare earths producer and exporter, supplying 90 percent of the global demand with only one-third of the world’s total reserves.

China has announced a series of policies for the rare earth industry since the latter half of last year, including export quota cuts, higher taxes and tighter regulation on mining companies.

The rare earth export tax hike, which goes into effect today, was announced by the Chinese government last December. The new export tax rates will be 60 yuan per tonne for light rare earths and 30 yuan per tonne for medium and heavy rare earths.

Rare earth metals, a collection of 17 chemical elements in the periodic table, are incorporated into many technological devices, including superconductors, samarium-cobalt and neodymium-iron-boron high-flux rare-earth magnets, electronic polishers, refining catalysts and hybrid car components (primarily batteries and magnets).

How Will China’s Rare Earth Output Quota Affect the Global Market in 2011?

China’s rare earth output quota for 2011 could have a major impact on the global market. The¬†2011 export reduction¬†could lead to a supply shortage, driving up prices and causing other countries to ramp up their own rare earth production. This could potentially shift the balance of power in the industry.

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