China tightens grip on rare earth sector with silent quota release
New Delhi, Jul 18, 2025
China released the initial batch of quotas for the year just last month, without making the usual public announcement. Firms were instructed to keep the figures confidential
China has quietly released its first rare earth mining and smelting quotas for 2025 without making the usual public announcement—another indication of Beijing tightening its hold on the strategically important industry.
Rare earth quotas issued without public notice
The quotas, which serve as a key indicator of global rare earth supply, were allocated last month without the customary statement from the government, Reuters reported. Companies involved were instructed not to disclose the figures due to “security reasons". Rare earths—comprising 17 critical elements—are essential in the manufacture of electric vehicles, wind turbines, industrial robots, and military equipment such as missiles. China remains the largest global producer of these minerals and has traditionally issued mining and smelting quotas twice annually to state-owned firms. However, the release was delayed this year.
China tightens control over rare earth sector
Beijing’s move to withhold public disclosure reflects growing sensitivity over rare earths, especially as the country asserts control over supply in ongoing trade disputes with the United States and the European Union. In response to US tariff increases, China placed several rare earth elements and related magnets on its export restriction list, effectively cutting off supplies. This action has already led some foreign automakers to partially halt production due to material shortages.
Over the past four years, China’s Ministry of Industry and Information Technology has published the first batch of quotas in the first quarter via its official website. In 2023, the total mining quota was set at 270,000 metric tonnes, with supply growth slowing to 5.9 per cent, compared to 21.4 per cent the year prior. Beijing introduced the quota system in 2006 and has increasingly relied on it—along with industry consolidation—to exert tighter control.
India eyes incentive scheme for rare earth processing
As China tightens its hold, India is looking to scale up domestic production. A proposed plan by the central government aims to incentivise private sector firms to manufacture rare-earth magnets, with a reported incentive pool of $290 million. According to Bloomberg, major conglomerates such as Anil Agarwal’s Vedanta Group, Sajjan Jindal’s JSW Group, and EV parts manufacturer Sona BLW Precision Forgings Ltd have expressed early interest in the scheme.
China's rare-earth metal exports spike to highest level since 2009
Despite these restrictions, China's rare earth exports surged in June to their highest level since 2009. The sharp increase indicates a global rush to secure these vital materials. Exports—comprising rare earths in both mineral and metal forms—rose to 7,742 tonnes, marking a 60 per cent year-on-year increase.
[The Business Standard]
