This year's total rare earth mining increased slightly

Recently, the Ministry of Land and Resources released a notice regarding the control of tungsten ore mining for 2014, reiterating the need to maintain strict oversight over rare earth and tungsten production. This announcement had a positive impact on the rare earth stock market, with shares rising sharply the day after the news broke.

China is home to some of the world's most valuable mineral resources, including rare earths, tungsten, and antimony. These materials are classified as "protected minerals," with the country holding the largest reserves and production levels globally. To ensure sustainable development and prevent overexploitation, the government has long imposed quotas on the extraction of these key resources. Since 2006, annual mining limits have been set for rare earth companies, helping to stabilize the market and protect national interests.

According to the latest notice, the total mining quota for tungsten in 2014 remained unchanged at 89,000 tons compared to 2013. However, the rare earth ore mining limit was raised by 11,200 tons, reaching 105,000 tons. This slight increase reflects the government’s attempt to balance supply and demand while supporting domestic producers.

Notably, the notice also mentioned that no new control targets would be issued for tantalum mining in 2014. This shift could signal a broader policy review or a move toward more flexible management of certain minerals.

Analysts suggest that the modest rise in rare earth mining quotas is a response to current market dynamics and an acknowledgment of the growing capacity of domestic firms. With ongoing efforts to consolidate the industry through mergers and acquisitions, larger state-backed enterprises are expected to dominate future production. New directives and mining permits are likely to favor these major players, further consolidating their influence.

In addition, stricter enforcement of regulations is expected to target smaller, unregulated mines. This crackdown aims to reduce illegal mining activities and bring actual output under tighter control. As a result, the overall supply chain may become more transparent and efficient.

Looking ahead, there are signs that China may adjust its export policies. Earlier this year, the World Trade Organization ruled that certain export restrictions—such as tariffs, quotas, and requirements on performance and capital—were inconsistent with WTO rules. Although China has appealed, a final decision is still pending. Meanwhile, foreign media reports suggest that Beijing may soon eliminate export tariffs and quotas on rare earths and related products.

Experts believe that the current export quotas are not fully utilized, indicating room for reform. If these restrictions are lifted, the government may introduce higher resource taxes to manage the flow of rare earths from the source. This could lead to higher prices in global markets, reinforcing China’s strategic position in the rare earth sector.