This year's total rare earth mining increased slightly

Recently, the Ministry of Land and Resources released the "Circular on Release of Controlling Indicators for Total Tungsten Ore Mining in 2014," emphasizing continued regulation of rare earth and tungsten mining quotas. This announcement has sparked a rise in rare earth stock prices as investors react to the tightening controls.

China is home to some of the world’s largest reserves of rare earths, tungsten, and antimony, all classified as protected minerals. To ensure sustainable development and protect these strategic resources, the government has long imposed strict limits on their extraction. Since 2006, it has been issuing annual mining quotas to approved companies in the rare earth sector.

The latest notice revealed that the total allowed tungsten ore mining in 2014 remained unchanged at 89,000 tons compared to 2013. However, the rare earth ore mining quota was increased by 11,200 tons, reaching 105,000 tons. This slight increase suggests a more flexible approach from the government, possibly in response to market demands and domestic production capacity.

Notably, the Ministry also announced that it will no longer set specific control targets for tantalum mining in 2014, signaling a shift in policy for certain mineral categories.

Industry experts believe that the modest increase in rare earth mining quotas reflects a balance between supporting domestic producers and maintaining control over supply. With ongoing efforts to consolidate the rare earth industry through mergers and acquisitions, larger state-backed groups are expected to benefit most from new permits and expanded quotas.

This regulatory adjustment may also lead to stricter oversight of smaller, private mines, aiming to reduce illegal or unregulated extraction and better manage actual output levels.

Looking ahead, there are growing expectations that China might introduce a resource tax on rare earths. This move could help raise domestic prices and generate additional revenue while aligning with international trade rules.

In March, the World Trade Organization ruled that China’s export restrictions on rare earths, including tariffs and quotas, violated WTO regulations. While China has appealed the decision, the final outcome remains uncertain. Recent reports suggest that China may be considering lifting these restrictions, which could significantly impact global rare earth markets.

If export quotas are removed, the government may instead implement a resource tax to maintain control over the industry and ensure fair pricing. This shift could reshape the competitive landscape and encourage more responsible mining practices across the sector.