Three Chinese Ministries Issue Major Interim Measures on Total Control of Rare Earth Separation

On August 22, the Ministry of Industry and Information Technology, the National Development and Reform Commission, and the Ministry of Natural Resources jointly issued the Interim Measures for Total Volume Control Management of Rare Earth Mining and Refining and Separation. The document stipulates that the state will implement total volume control management over rare earth mining (including rare earth mineral products) and the refining and separation of all types of rare earth mineral products (including monazite concentrate) obtained through mining, importation, and processing of other minerals.

　　Analysts note that total volume control over rare earth mining, smelting, and separation will enable more effective management of this strategic resource, safeguarding national economic and defense security while securing a strategic advantage in international competition. Securities institutions believe that driven by both intensified supply controls and surging high-end demand, the strategic value of the rare earth permanent magnet sector continues to rise. Rare earth prices are expected to maintain an upward trajectory around their central level from 2025 to 2026.

Three Ministries Issue Major Announcement

　　On August 22, the Ministry of Industry and Information Technology (MIIT) announced on its official website that to strengthen total volume control management of rare earth mining and smelting/separation, MIIT, the National Development and Reform Commission (NDRC), and the Ministry of Natural Resources jointly issued the Interim Measures for Total Volume Control Management of Rare Earth Mining and Smelting/Separation (hereinafter referred to as the Interim Measures).

　　The Interim Measures stipulate that the state implements total volume control management over rare earth mining (including rare earth mineral products) and the smelting and separation of all types of rare earth mineral products (including monazite concentrate) obtained through mining, importation, or processing of other minerals. The Ministry of Industry and Information Technology, in conjunction with the Ministry of Natural Resources and the National Development and Reform Commission, shall formulate annual total control quotas for rare earth mining and rare earth smelting and separation (hereinafter referred to as “total control quotas”) based on factors including national economic development goals, variations in national rare earth reserves and types, rare earth industry development, ecological conservation, and market demand. These quotas shall be submitted to the State Council for approval.

　　The Ministry of Industry and Information Technology, in conjunction with the Ministry of Natural Resources, shall refine and allocate the total control quotas to rare earth mining enterprises and rare earth smelting and separation enterprises (hereinafter collectively referred to as “rare earth production enterprises”) based on the total control quotas approved by the State Council. This allocation shall take into comprehensive consideration factors such as the production capacity, technological level, and environmental protection and safety standards of rare earth production enterprises. The relevant provincial-level people's governments' departments responsible for industry and information technology and natural resources shall be notified accordingly.

　　The Interim Measures stipulate that rare earth production enterprises shall strictly comply with laws, administrative regulations, and relevant national provisions when engaging in rare earth mining and rare earth smelting and separation within the scope of the total control quotas. Rare earth production enterprises shall be designated by the Ministry of Industry and Information Technology in conjunction with the Ministry of Natural Resources. No other organizations or individuals may engage in rare earth mining or rare earth smelting and separation except those designated under the preceding paragraph. Rare earth production enterprises shall be responsible for the implementation of their respective total control quotas.

　　The Interim Measures require rare earth production enterprises to establish a rare earth product flow record system, truthfully documenting the flow information of rare earth products. By the 10th day of each month, they must input the previous month's rare earth product flow information into the rare earth product traceability information system established by the Ministry of Industry and Information Technology in conjunction with relevant departments. The competent departments of industry and information technology and natural resources at or above the county level shall strengthen supervision and inspection of the implementation of total control quotas, investigate and handle violations in accordance with the law, and strictly enforce the provisions and requirements of laws, administrative regulations, and the State Council concerning administrative inspections involving enterprises. This ensures that supervision and inspection are legally grounded, strictly standardized, fair and civilized, precise, and efficient.

　　The Interim Measures stipulate that if rare earth producers violate these provisions or refuse/obstruct supervisory authorities from performing their duties, the competent departments of industry and information technology and natural resources at or above the county level shall order rectification according to their respective responsibilities and impose penalties in accordance with the Mineral Resources Law of the People's Republic of China, the Regulations on the Administration of Rare Earths, and other relevant laws and administrative regulations.

　　The Interim Measures further stipulate that rare earth production enterprises subject to administrative penalties for violating these provisions shall have their total production quotas for the following year reduced. Staff members of the competent departments of industry and information technology, natural resources, and development and reform who abuse their authority, neglect their duties, or engage in malpractice in the management of total control over rare earth mining and rare earth smelting and separation shall be disciplined in accordance with the law. Violations of these Measures that constitute violations of public security management shall be subject to public security administrative penalties in accordance with the law; if they constitute a crime, criminal liability shall be pursued in accordance with the law.