China has increased its rare earth metal production quota by 14% to 240,000 tons in 2023 to support its booming electric vehicle industry. On September 25, China's Ministry of Industry and Information Technology and the Ministry of Natural Resources issued a notice on the "Second Batch of Total Volume Control Indicators for Rare Earth Mining, Smelting and Separation in 2023", which mentioned that the second batch of total volume control indicators for rare earth mining, smelting and separation in 2023 are 120,000 tons and 115,000 tons respectively.
The total control indicators for rare earth mining, smelting and separation in the first two batches of 2023 are 240,000 tons and 230,000 tons respectively. There are reserved indicators for 2023, and the number of indicators for the whole year will be finalized by taking into account factors such as changes in market demand and the implementation of indicators of each rare earth group.
The Ministry of Industry and Information Technology pointed out that rare earths are products subject to total production control and management by the state, and no unit or individual is allowed to produce without quotas or beyond quotas.
Rare earth elements play an important role in the electric motors, batteries and control systems of new energy vehicles. Some media reported that the latest quota expansion means that China’s rare earth production will continue to grow again since 2018. China will produce 7 million new energy vehicles in 2022, ranking first in the world in terms of output. The goal is to further increase domestic sales and exports, thereby increasing demand for a stable supply of rare earths.
The U.S. Geological Survey estimates that China will account for 70% of global rare earth production in 2022.
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