The proposal outlines a traceability system for rare earths, providing the government with more information regarding the sector.
The Chinese government seeks to tighten its control over the domestic rare earth industry further through a set of new regulations published Wednesday by the Ministry of Industry and Information Technology. The proposal outlines a traceability system for the sector to provide the government with additional information regarding the origin, supply chain, and export of rare earths. In addition, the draft also clarifies that only authorized enterprises may obtain quotas to mine and process rare earths. Other provisions include monthly data provisions from rare earth enterprises, as well as random inspections to advance the sector in a responsible manner.
The ministry invites stakeholder comments on the draft regulations until March 21.
China’s Rare Earth Dominance
The proposed traceability system also briefly mentions export licenses, which so far have not been enacted for rare earth material, only for certain related technologies. In comparison, since 2023, exporters of the metals gallium, germanium, and antimony must obtain official licenses to ship goods abroad. China dominates the global rare earth industry, accounting for approximately 60% of global production and up to 95% of downstream processing. As a result, any licensing requirements could significantly disrupt global supply chains.
Through a series of industry consolidations, China’s rare earth sector has been streamlined to just a few key players, with only two major companies dominating the mining segment, for example. This consolidation was driven, in part, by the government’s strategy to exert greater control over the industry. Find out more about the consolidation of China’s rare earth industry in our background report.
Photo: Aflo images
