China Quietly Issues 2025 Rare Earth Quotas Amid Global Supply Tightening

China has taken a significant step in tightening its control over the global rare earth supplies by quietly issuing its 2025 rare earth mining and smelting quotas. This move, which was not publicly declared, underscores the country's strategic approach to managing its dominance in the rare earth sector. The quotas are crucial indicators for the global supply of rare earth elements, which are essential for various high-tech applications, including electric vehicles and wind turbines.

For years, China’s Ministry of Industry and Information Technology has published its first quarterly quota on its website, usually in the opening months of the year. In contrast, this year’s decision came in silence, underlining Beijing’s growing caution about releasing data that reflects its grip on global supplies. Companies granted permission to mine and process these critical minerals were asked to keep the figures confidential, reportedly for security. Neither the volume nor the specific breakdown of mining versus smelting allowances has been disclosed.

China issued two rounds of mining quotas last year, totalling 270,000 metric tons. That output allowance represented a slowdown in annual growth to 5.9 percent, down from a 21.4 percent increase in 2023. Smelting and separation permits for 2024 were also set in two batches, amounting to 254,000 tons, up 4.2 percent on the previous year. The decision to issue the quotas without a public announcement comes as China continues to assert its influence in the rare earth market.

In a related development, China’s shipments of rare earths and magnets to America rebounded sharply in June. The General Administration of Customs data shows exports climbed to 353 metric tons, a 660 percent jump compared with May’s 46 tons. That surge followed late-June agreements aimed at clearing a backlog of export licences for magnets and rare earths bound for U.S. customers. Earlier this year, Beijing had added several rare earth items and related magnets to its export restriction list in early April, a response to American tariffs. The move stalled shipments in April and May, disrupting supply chains. Some overseas automakers reportedly scaled back production amid the squeeze.

Globally, China exported 3,188 tons of permanent rare earth magnets in June, up 157.5 percent from May’s 1,238 tons. Despite the rebound, June’s total remained 38.1 percent below the 5,158 tons shipped in June 2024. Market watchers expect exports to climb further in July as more firms secure the necessary licences. Still, for the first half of 2025, China’s magnet exports were down 18.9 percent year-on-year, at 22,319 tons.

China's tightening control over rare earth supplies is part of a broader strategy to enhance its national security and economic interests. The country has vowed to strengthen controls on the entire supply chains of strategic mineral exports, particularly those deemed crucial for national security. This includes tougher law enforcement against the smuggling of strategic minerals, as well as measures to curb the theft of controlled rare earth materials by overseas intelligence agencies.

The crackdown on strategic mineral smugglers and the strengthening of export controls are aimed at ensuring that China maintains its leadership in the rare earth sector. This leadership is not only crucial for the country's economic development but also for its defense procurement and technological advancements. The move to tighten control over rare earth supplies comes at a time when global demand for these elements is expected to rise, driven by the increasing adoption of electric vehicles and renewable energy technologies.

China's actions in the rare earth sector have significant implications for the global market. The country's dominance in rare earth production and processing gives it a strategic advantage in negotiations with other nations. This advantage is likely to be leveraged in future trade discussions, particularly with the US and EU, as China seeks to protect its interests and ensure a stable supply of rare earth elements for its own industries.