context: On 29 June, the State Council released rare earth management regulations, effective from 1 October 2024. The new regulations are the first comprehensive sets of legislation to tighten state control over rare earths, considered a strategic resource. This move follows earlier department-level measures, such as export restrictions.
Compared to its 2021 draft, the final version of the rare earth management regulations has heightened legislative purposes, stricter import and export restrictions, harsher penalties for illegal products, more coordinated national planning and an expanded scope of restricted minerals, argue Li Chao 李超 Guojin Sinolink Securities chief metal analyst and his collaborator Wang Qinyang 王钦扬.
According to Li and Wang, the final version of the regulations elevates the legislative purpose of the previous draft, adding terms such as
- effective protection
- industrial security
On the scope of restriction, the previous version covered only
- rare earth mining
- smelting and separation
- metal smelting
- comprehensive utilisation
- product circulation
The new version introduces stricter control, they argue, by
- adding 'import and export' to the scope of restriction
- deleting the clause that allowed imported rare earth products for smelting and separation beyond the total quantity indicators
The new regulations also increase visibility and crackdown over illegal ‘black’ rare earths, through
- improving the traceability system
- adding more categories of companies to be monitored such as
- comprehensive utilisation enterprises
- import and export enterprises
- penalties for exporting illegal products
- now ranging from 5 to 10 times the illegal income, up from the previous 1 to 5 times
The scope of restricted rare earth products has also expanded, now including
- alloys, a broad concept implying stricter control over processed products
- other strategic minerals such as
- antimony
- tungsten
Regarding industry macro-planning, the state now unifies planning for the rare earth industry, replacing the previous clause that designated the Ministry of Industry and Information Technology and the Ministry of Natural Resources, explain Li and Wang.