China sets record rare earth mining quota as demand rises
China set its annual rare-earth mining quota at the highest on record as domestic demand for the strategic materials, used in everything from electric vehicles to military hardware, increases.
The quota for six dominant producers, including China Northern Rare Earth Group High-Tech Co., was set at 132,000 tons for 2019, the Ministry of Industry and Information Technology said in a statement on Friday. That compares with 120,000 tons in 2018 and is the highest in data going back to 2014.
The higher quota follows requests from major companies in the industry to allow more production to meet rising demand, said Zhang Rui, an analyst at state-run researcher Beijing Antaike Information Development Co. Rare-earth prices may fluctuate within a small range as the increase in supply might be offset by magnet producers’ stockpiling raw materials at the end of the year, according to Zhang.
Rare earths were thrust into the spotlight earlier this year on speculation China may restrict exports as part of its trade war with the U.S. On Monday, markets were parsing the latest in the dispute after an onslaught of contradictory headlines about progress toward an interim deal.
Officials from the two countries both said Thursday last week that a phase-one agreement would feature pledges to roll back tariffs on each others’ goods in phases, but President Donald Trump said Friday that the U.S. hasn’t agreed to a rollback, dimming hopes for a preliminary trade deal anytime soon. Trump then said over the weekend that talks with China are moving along “very nicely,” and said the leaders in Beijing wanted a deal “much more than I do.”
(By Winnie Zhu)