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COMMODITIES

China issues third batch of rare earth quotas for 2023

Allowances are closely monitored as an indicator of supply

BEIJING (Reuters) -- China has set its third batch of quotas this year for rare earth mining output at 15,000 tonnes, the Industry and Information Technology Ministry said on Friday.

The world's largest producer and consumer of rare earths also set its third batch of quotas for rare earth smelting and separation at 13,850 tonnes, the ministry said in a statement.

The quotas are closely monitored by market participants as an indicator of supply.

Beijing issued the first and second batch of quotas in March and September, respectively.

Rare earths are a group of 17 elements used in products from lasers and military equipment to magnets found in electric vehicles, wind turbines and consumer electronics.

"This is really out of our expectation as such kind of quota is typically issued twice a year," said a Chinese analyst, requiring anonymity as he is not authorized to speak to media.

"And the addition in quota might be because volumes issued in the first two batches could not meet demand needs."

Earlier in November, China said it would promote the high-quality development of the rare earth industry, which has been in the spotlight after Beijing's introduction of export controls for a few critical minerals sparked concerns that rare earths might be the next target.

The new allowances take the 2023 total rare earth mining quota to 255,000 tonnes, and the total smelting and separation quota to 243,850 tonnes, up 21.4% and 20.7%, respectively, from a year before, versus year-on-year rises of 25% and 24.7% in 2022.

China has also become a major importer of rare earths, with imports in November surging 125% on the year to 14,315 tonnes, and imported volumes from January to November totaling 159,472 tonnes, up 44.7% on the year.