File Photo of a rare-earth mine in Southwest China's Yunnan Province Photo: VCG

China set a quota for the first batch of rare-earth mining in 2023 at 120,000 tons on Friday, up by about 20 percent compared with last year's level, with a quota for smelting and separation at 115,000 tons, also up from 97,200 tons in 2022.

"The roughly 20 percent jump was mainly due to China's surging demand for neodymium magnets, also known as NdFeB, along with the rapid development of the country's electric vehicle sector," Wu Chenhui, an independent industry analyst who follows the rare-earth industry, told the Global Times on Friday.

However, authorities delayed the announcement of the quota, in contrast with the January announcement last year, showing that the government is evaluating market demand following the recovery of the economy, experts said.

"With China being a major producer of rare earths globally, the increase of its rare-earth quota will ease other countries' concerns over China's rare-earth exports this year," Wu said.

Rare earths are important strategic resources and key elements in the development of high and new technology and green applications. 

China leads the world's rare-earth sector in terms of production and refining technologies. Over the past five years, the total annual mining quota issued to producers in China has doubled, from 105,000 tons in 2017 to 210,000 tons in 2022.

Amid growing geopolitical tensions, some countries including the US and the EU are mulling ways to reduce their reliance on China's rare-earth products. However, experts said that it is tough to shake off reliance on China, given its multiple advantages such as cheap raw materials and labor costs, world-leading technologies such as earth separation, and wide product range.

In the first two months of the year, China's rare-earth exports slid 5.6 percent year-on-year to 7,391.2 tons, but the value increased 24.8 percent to a total 1 billion yuan ($145 million), according to data from the General Administration of Customs.

China generally releases rare-earth quota twice a year, with each covering six months.

Global Times