China quietly sets 2025 rare earth quotas amid rising global tensions

China has quietly announced its first 2025 quotas for rare earth mining and smelting without making the usual public announcement, according to people familiar with the situation this week. This is another indication that Beijing is strengthening its hold on the vital industry.

The quotas are extensively watched as a barometer for the world supply of rare earths, a class of 17 elements utilised in electric cars, wind turbines, robotics, and missiles. China is the world’s largest producer of these minerals, and the government usually issues them twice a year to state-owned enterprises, but this year they have been delayed.

According to the sources, the government only provided the first batch of quotas for the year last month, without any public declaration, and one of sources stated that the companies were instructed not to divulge the numbers for security concerns. These details are being reported here for the first time.

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The sources did not provide the quota volumes.

China is becoming increasingly sensitive about rare earths and its control over the supply, which it is ready to underline during trade talks with the United States and the European Union.

In response for US tariff rises, Beijing added seven elements and associated magnets to its export restriction list, cutting off supplies and pushing several automakers outside China to partly shut down production.

In the previous four years, China’s Ministry of Industry and Information Technology issued the first batch of quotas in the first quarter of the year in an announcement on its website.

The Ministry did not immediately reply to a request sent by fax for a comment on why the information has not been publicly issued.

Last year, China issued two batches of mining quotas for 270,000 metric tons, with annual supply growth slowing to 5.9% from 21.4% in 2023.

The smelting and separation quota in 2024 was also in two batches, totalling 254,000 tons, up 4.2% from 2023.

Beijing has used the quota system, first introduced in 2006, and corporate consolidation to tame the industry and give officials control over output.

Beijing has narrowed access to the quotas, with only two state-owned groups - China Rare Earth Group and China Northern Rare Earth Group High-Tech - eligible last year, down from six previously.

The quotas were delayed this year partly because of a proposal in February to add imported ore into the quota system, which sparked opposition from companies that rely on imports and were concerned they could lose access to feedstock, according to the two sources and an additional source with knowledge of the matter.