Highlights

• China issues 2025 rare earth mining quotas without public disclosure.
• Reduces eligible firms from six to two state-owned companies.
• Export restrictions and quota opacity suggest Beijing's tightening control over critical mineral supply chains.
• Geopolitical tensions and potential supply disruptions create significant risks for international buyers and investors.

In a quiet but consequential move, China has issued its first batch of 2025 rare earth mining and smelting quotas without the usual public disclosure, according to a Reuters report published by The Economic Times. The decision marks a shift toward greater opacity in Beijing’s already tight grip on the global rare earths sector.

Sources told Reuters that state-owned companies received quota allocations in June, but were instructed not to disclose volumes—an unprecedented break from the Ministry of Industry and Information Technology’s regular public posting of quota data. In previous years, these announcements served as global benchmarks for pricing and supply chain planning.

China's move comes amid escalating U.S.-China and EU-China trade tensions, with rare earths increasingly used as a strategic bargaining chip. In 2024, China imposed export restrictions on rare earth magnets and key elements such as dysprosium, prompting production disruptions among automakers and wind energy producers abroad.

The quota silence coincides with China’s plan to possibly fold imported ore volumes into the quota system. This proposal has alarmed Chinese processors dependent on overseas feedstock and could further restrict global supply. Last year’s combined quota was 270,000 tonnes for mining and 254,000 tonnes for smelting; however, the 2025 figures remain undisclosed.

Only two state-owned firms—China Rare Earth Group and China Northern Rare Earth Group—remain eligible for quota allocations, down from six in recent years. This reflects Beijing’s consolidation push, aiming to reduce overproduction and tighten resource security under central control.

Key Questions for Investors

• What are the actual 2025 quota volumes, and how do they compare to 2024’s growth of just 5.9%?
• Will international buyers face rolling shortages or price spikes from sudden export restrictions?
• Could the lack of transparency drive buyers toward non-China sources in Africa, India, or the Americas despite higher costs?

With critical supply information now behind closed doors, the rare earth market is entering a new era of geopolitical risk. Retail and institutional investors should closely monitor trade negotiations and reassess their exposure to Chinese-dominated supply chains.

Source: The Economic Times | Author: Reuters (via ET Business Desk)