China has issued its first 2025 %RareEarth mining and smelting quotas as the government in Beijing tightens its control over the critically important sector.
The Chinese quotas were issued without the typical public statement from the government, a move that may reflect ongoing tensions over rare earth elements with the U.S.
China is the world’s top supplier of rare earth metals and minerals, and its quotas impact the global supply.
Rare earths are a group of 17 elements used in electric vehicles, wind turbines, robots, laptop computers, smartphones, and missiles, among other products.
The rare earth elements are vital to leading U.S. companies as they are needed to make %Tesla (NASDAQ: $TSLA) electric vehicles, %Apple (NASDAQ: $AAPL) iPhones, and %Nvidia (NASDAQ: $NVDA) microchips.
China’s government has not made public the latest quota numbers, though it acknowledges they’ve been provided to various state-owned companies.
China is increasingly sensitive about rare earths and its control over the supply, which it has been willing to assert amid its trade negotiations with the U.S.
Beijing added several of rare earth elements to its export restriction list in retaliation for U.S. tariffs, cutting off supply and forcing some automakers to partially shutdown production.
In 2024, China issued two batches of mining quotas for 270,000 metric tons, with annual supply growth slowing to 5.9% from 21.4% in 2023.
The smelting and separation quota in 2024 totaled 254,000 tons, up 4.2% from 2023.
Beijing has used the quota system for its rare earth elements since 2006. It has also forced corporate consolidation in the sector to give the government control over annual output.
Beijing has narrowed access to the quotas, with only two state-owned groups, China Rare Earth Group and China Northern Rare Earth Group High-Tech, currently eligible to produce and sell the metals, minerals and magnets.
The U.S. government has singled out access to China’s rare earth elements as a major concern and point of political tension between the two countries.
