Rare Earth Magnet Industry Insights
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China Introduces Total Control of Rare Earth Production
2025-8-25
Summary
China has introduced interim measures to impose total control over rare earth mining, smelting, and separation. The new policy establishes annual production quotas, strengthens traceability requirements, and tightens enforcement across the supply chain. As China plays a dominant role in global rare earth production, the measures are expected to reshape supply stability, pricing dynamics, and downstream industries such as permanent magnets, EVs, and clean energy technologies.
Background of the Interim Measures
On August 22, 2025, China’s Ministry of Industry and Information Technology (MIIT), together with the National Development and Reform Commission (NDRC) and the Ministry of Natural Resources (MNR), jointly issued interim measures introducing total control over rare earth mining and the smelting and separation of rare earth mineral products.
The measures mark a significant escalation in regulatory oversight and signal the beginning of a more strictly governed era for China’s rare earth industry.
Total Control Quotas for Rare Earth Production
Annual Quota Formulation and Approval
Under the new framework, MIIT, in coordination with the NDRC and MNR, will study and formulate annual total control quotas, submit them to the State Council for approval, and formally issue them to qualified rare earth production enterprises.
Strict Compliance with Approved Quotas
Rare earth production enterprises are required to carry out mining, smelting, and separation activities strictly within the scope of their approved quotas. Any production beyond authorized limits is explicitly prohibited.
Traceability and Regulatory Enforcement
Rare Earth Product Traceability System
Enterprises must accurately record the movement of rare earth products and submit relevant data to the national rare earth product traceability information system, strengthening end-to-end supervision across the supply chain.
Penalties for Non-Compliance
Violations of the measures will result in administrative penalties, including reductions in total control quotas for the following year, increasing long-term operational risks for non-compliant producers.
Impact on the Global Rare Earth Industry
Given China’s dominant role in global rare earth mining and processing, the implementation of total control measures is expected to influence global supply availability, price dynamics, and downstream manufacturing sectors such as permanent magnets, electric vehicles, and clean energy technologies.
Conclusion
China’s decision to introduce total control over rare earth production represents a major policy milestone. By tightening quotas, strengthening traceability, and increasing enforcement, the measures aim to promote sustainable resource management while reshaping global expectations for rare earth supply stability.
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