Breaking: China Proposed Regulations on "Administrative Measures for the Total Control of Rare Earth Mining, Smelting and Separation"
Rare Earth 21 February 2025 #168
Intro
We had warned not to look at China as a large trash can for all things rare earth. Now things may be changing.
Before any of the junior miners starts hyperventilating again, these are PROPOSED regulations for PUBLIC COMMENT. This is NOT an implementation. The comment period ends on 21 March 2025. At which time the regulation will not go into effect immediately, but public comments will be considered.
What it means
However, this proposed regulation means that - if this PROPOSED regulation ever goes into force - it will be the end of unregulated imports of rare earth raw materials and processing thereof.
Impact on junior rare earth miners
Concretely, if you are a junior rare earth miner who wants to produce a rare earth concentrate, mixed rare earth carbonate or a mixed rare earth oxide, your product can only be imported to China if your customer also has a quota for processing the relevant quantity.
To put it even more bluntly: If you are a junior rare earth miner, you’d better have a customer in the West for your product, because it will be anything but certain that you can place your quantities on the China market.
You are of course free to stir your product in your morning coffee.
Our take
If implemented this regulation will effectively cull all junior rare earth miners out there. Unless, they have a behemoth Chinese rare earth company as shareholder, then the respective junior rare earth miner will be fine.
Who will benefit
Western rare earth companies which do include processing of rare earth resources to final, usable, market adequate rare earth compounds and metals.
In Australia that would likely be Iluka and Arafura, in the U.S. Energy Fuels and Rare Element Resources. Subject to further analysis in Canada SRC, in Europe Neo Performance Materials.
Who will suffer
Anyone who ships rare earth raw materials, finished and semi-finished rare earth to China.
Subject to further analysis, affected may be Lynas, MP Materials, all artisanal miners in Africa, Serra Verde in Brazil and all junior rare earth miners who had been banking on the rare earth trash can in China.
Below please find the announcement of the Ministry of Industry & Information Technology and the appendices.
Public Solicitation of Opinions on the Administrative Measures for the Total Control of Rare Earth Mining and Smelting and Separation (Provisional) (Draft for Public Comments) and the Administrative Measures for the Information Traceability of Rare Earth Products (Provisional) (Draft for Public Comments)
Gongyuanhan [2025] No. 33
In order to implement the "Rare Earth Management Regulations", effectively protect and rationally develop and utilize rare earth resources, maintain ecological security, and promote the high-quality development of the rare earth industry, the Raw Materials Industry Department of the Ministry of Industry and Information Technology has drafted the "Measures for the Total Control of Rare Earth Mining and Rare Earth Smelting and Separation (Interim) (Draft for Public Comments)" and the "Measures for the Information Traceability of Rare Earth Products (Interim) (Draft for Public Comments)" (see attachment), and now solicit public opinions. The public can make comments and suggestions in the following ways:
1. Send via email to: ysc@miit.gov.cn.
2. Please send your comments by letter to: Raw Materials Industry Department, Ministry of Industry and Information Technology, No. 13 West Chang'an Avenue, Postal Code: 100804.
Please indicate the subject "Feedback on the Measures for the Administration of Total Rare Earth Quantity Control/Measures for the Administration of Traceability of Rare Earth Products" in the email or letter, and leave your contact information.
The deadline for feedback is March 21st.
Raw Materials Industry Department of the Ministry of Industry and Information Technology
February 19, 2025
Appendix 1
Measures for the Control and Administration of Total Amount of Rare Earth Mining and Smelting and Separation
(Provisional) (Draft for public comments)
Chapter I General Provisions
Article 1 [Basis for formulation] In order to effectively protect and rationally develop and utilize rare earth resources, regulate rare earth mining and rare earth smelting and separation production activities, and promote the rare earth industry high-quality development, in accordance with the Mineral Resources Law of the People's Republic of China these Measures are formulated in accordance with the Regulations on the Administration of Industry and Information Technology and other laws, regulations and relevant national provisions.
Article 2 [Scope of Application] Rare earth mining within the territory of the People's Republic of China and rare earth smelting and separation production activities.
The rare earth mining referred to in these Measures refers to bastnaesite, ionic rare earth ores, rare earth minerals are produced after various rare earth ores such as quartzite and mixed rare earth ore are mined and selected.
The production process of rare earth products (including rare earth concentrates, rare earth enrichments, etc.). The rare earth smelting and separation referred to in these Measures refers to the processing of rare earth mineral products into products of single or mixed rare earth oxides, salts and other compounds
Among them, rare earth mineral products include rare earth mineral products obtained from domestic mining and selection, imported rare earth mineral products, monazite concentrate, etc., are processed through other rare earth mineral by-products, rare earth mineral products, as well as other types of rare earth mineral products, etc.
Article 3 [Management Mechanism] The Ministry of Industry and Information Technology, the Ministry of Natural Resources, the National Development & Reform Commission are responsible for the total amount control and management of rare earth mining and rare earth smelting and separation work to formulate and issue annual rare earth mining and rare earth smelting and separation total control indicators (hereinafter referred to as rare earth indicators).
Article 4 [Enterprise Entity] The Ministry of Industry and Information Technology, together with relevant departments, shall determine rare earth mining enterprises and rare earth smelting and separation enterprises and make them public. Rare earth mining enterprises and rare earth smelting and separation enterprises shall be large rare earth enterprise groups (hereinafter referred to as rare earth groups) promoted by the state and their affiliated rare earth mining enterprises and rare earth smelting and separation enterprises.
Except for enterprises determined in accordance with the first paragraph of this article, other organizations and individuals shall not obtain rare earth quotas. Organizations and individuals that have not obtained rare earth quotas shall not carry out rare earth mining and smelting and separation production activities.
Article 5 [Local Responsibilities] The competent departments of industry and information technology and natural resources at or above the county level shall be responsible for the supervision and management of the implementation of the total amount control of rare earth mining and rare earth smelting and separation in their respective regions in accordance with their duties.
Article 6 [Corporate Responsibility] The Rare Earth Group is responsible for the implementation of the rare earth indicators of the rare earth mining enterprises and rare earth smelting and separation enterprises under the Group, and the rare earth mining enterprises and rare earth smelting and separation enterprises under the Rare Earth Group are primarily responsible for the implementation of the rare earth indicators of their own enterprises.
Chapter II Determination and Issuance of Rare Earth Indicators
Article 7 [Indicator Determination] The Ministry of Industry and Information Technology, together with the Ministry of Natural Resources and the National Development and Reform Commission, will study and formulate the rare earth indicators for the current year based on factors such as rare earth resource reserves and differences in types, industrial development, ecological protection, and market demand, and submit them to the State Council for approval.
Article 8 [Indicator Allocation] The Ministry of Industry and Information Technology and the Ministry of Natural Resources issue rare earth quota notifications to rare earth groups and relevant provincial (autonomous region, municipal) industrial and information technology and natural resources authorities twice a year, clarifying the quota issuance quantity, basic enterprise conditions and other requirements.
Article 9 [Indicator Decomposition] Rare earth groups should, in accordance with the relevant requirements of the annual rare earth quota issuance notice, consult with the relevant provincial (autonomous region, municipal) industrial and information technology, and natural resources authorities, and allocate rare earth quotas to their affiliated rare earth mining enterprises and rare earth smelting and separation enterprises, and report them to the Ministry of Industry and Information Technology, the Ministry of Natural Resources, and the relevant provincial (autonomous region, municipal) industrial and information technology, and natural resources authorities for filing.
Chapter III Implementation of Rare Earth Index
Article 10 [Indicator Implementation] Rare earth mining enterprises and rare earth smelting and separation enterprises affiliated to the rare earth group should carry out production activities in accordance with the rare earth indicators obtained.
Article 11 [Production Information Reporting] Rare earth mining enterprises and rare earth smelting and separation enterprises affiliated to the Rare Earth Group shall submit the production data and target completion of the previous month to the provincial industrial and information technology authorities of their locations every month. The Rare Earth Group shall submit the production data and target completion of the previous month to the Ministry of Industry and Information Technology every month, and submit the production data and target completion of the current year at the end of the year.
The Rare Earth Group and its affiliated rare earth mining enterprises and rare earth smelting and separation enterprises shall not refuse to report, falsely report, conceal or arbitrarily change the data, and shall be responsible for the authenticity of the data.
Article 12 [Product Traceability] Rare earth groups and their affiliated rare earth mining enterprises and rare earth smelting and separation enterprises should establish internal rare earth product traceability information systems and rare earth product flow record systems, truthfully record rare earth product flow information and enter it into the rare earth product traceability information system established by the Ministry of Industry and Information Technology in conjunction with relevant departments.
Article 13 [Data Security] Rare earth groups and their affiliated rare earth mining enterprises and rare earth smelting and separation enterprises must fulfill their network and data security protection obligations in accordance with the law, establish and improve network and data security management systems, improve the level of network and data security protection, and ensure the security of enterprise production data.
Chapter 4 Supervision of Rare Earth Index
Article 14 [Local Supervision] The industrial and information technology and natural resources authorities at or above the county level should make full use of information technology tools such as the rare earth product traceability information system, conduct monthly inspections on the implementation of rare earth indicators by rare earth mining enterprises and rare earth smelting and separation enterprises within their jurisdiction, carry out random inspections, promptly report any problems found to the superior authorities and propose treatment measures, and promptly handle them in accordance with relevant laws and regulations, urge problem enterprises to make rectifications, and make sure that rectifications are made as soon as they are checked.
Article 15 [Departmental Supervision] The Ministry of Industry and Information Technology and the Ministry of Natural Resources jointly with relevant departments regularly dispatch the relevant provincial (autonomous region, municipal) industrial and information technology and natural resources authorities to monitor the indicators in accordance with relevant laws and regulations, conduct irregular inspections on the implementation of indicators by rare earth groups and their affiliated rare earth mining enterprises and rare earth smelting and separation enterprises, and promptly feedback any problems found to the provincial people's governments and the State-owned Assets Supervision and Administration Commission of the State Council, and report typical cases.
Article 16 [Accountability and Punishment] If the rare earth group and its affiliated rare earth mining enterprises and rare earth smelting and separation enterprises have violated laws and regulations such as exceeding the quota or producing without quota, the corresponding responsibilities shall be investigated in accordance with relevant laws and regulations; if the circumstances are serious, they shall be ordered to suspend production and business, and the main person in charge, the directly responsible supervisor and other directly responsible persons shall be punished according to law; those suspected of committing crimes shall be transferred to the public security organs for handling.
If the rare earth mining enterprises and rare earth smelting and separation enterprises affiliated to the rare earth group have violated laws and regulations such as exceeding the quota, the rare earth quota for the next year shall be reduced.
Article 17 [Enforcement Supervision] If the industrial and information technology and natural resources management departments at all levels and their staff abuse their power, neglect their duties, or engage in malpractice for personal gain in the supervision of rare earth indicators, they shall be held accountable in accordance with relevant laws and regulations, and those suspected of committing crimes shall be transferred to the public security organs for handling.
Chapter V Supplementary Provisions
Article 18 The Ministry of Industry and Information Technology, the Ministry of Natural Resources and the National Development and Reform Commission are responsible for interpreting these measures, which will be revised in due course based on actual conditions.
Article 19 This measure shall be implemented from the date of month (year). The Notice on Issuing the Interim Measures for the Management of Rare Earth Mandatory Production Plan (Ministry of Industry and Information Technology [2012] No. 285) issued by the Ministry of Industry and Information Technology shall be abolished.
Appendix 2
Measures for the management of information traceability of rare earth products
(Provisional) (Draft for public comments)
Chapter 1 General Provisions
Article 1 [Basis for Formulation] In order to strengthen the information traceability management of rare earth products and improve the management efficiency of promoting the high-quality development of the rare earth industry, this regulation is formulated in accordance with the "Rare Earth Management Regulations".
Article 2 [Scope of Application] Enterprises engaged in rare earth mining, smelting and separation, metal smelting, comprehensive utilisation and export of rare earth products within the territory of the People's Republic of China (hereinafter referred to as "rare earth enterprises") shall be subject to these Measures for the traceability management of rare earth product information.
Rare earth products referred to in these Measures refer to rare earth mineral products, various rare earth compounds, various rare earth metals and alloys, etc.
Rare earth product information traceability management referred to in these Measures refers to the use of the rare earth product traceability information system (hereinafter referred to as the "rare earth traceability system") to record the flow information of each link of rare earth product production, circulation, use, etc., to meet the needs of industry management and legal operation of enterprises.
Article 3 [Management Mechanism] The Ministry of Industry and Information Technology, together with the Ministry of Natural Resources, the Ministry of Commerce, the General Administration of Customs, the State Administration of Taxation and other departments, shall establish a rare earth traceability system, strengthen the whole process traceability management of rare earth products, and promote data sharing among relevant departments.
The Ministry of Natural Resources, the Ministry of Commerce, the General Administration of Customs, the State Administration of Taxation and other departments shall, in accordance with their duties, link the rare earth mining indicators, export licenses, product exports, special invoices and other related data with the rare earth traceability system. Among them, relevant sensitive data in the export control license of dual-use items involving national security is excluded. The competent departments of industry and information technology at or above the county level shall, together with the competent departments of natural resources, commerce, customs, taxation and other departments, be responsible for the information traceability management of rare earth products in their respective regions.
Chapter 2 Operation of the Rare Earth Traceability System
Article 4 [Operation Management] The Ministry of Industry and Information Technology entrusts a professional third-party organization to be responsible for the daily operation and management of the rare earth traceability system (hereinafter referred to as the "operation management organization").
Article 5 [Traceability Information] The rare earth traceability system sets basic indicators for the traceability of rare earth product information, including but not limited to: product name, product category, product batch number, production or sales product quantity, product specifications, production or sales time, product procurement object, product sales object, product special invoice, product export license, product inventory, etc.
Article 6 [Account Application] Rare earth enterprises shall log in to the rare earth traceability system, fill in the subject information, upload the certification materials, and submit the registration application.
The competent departments of industry and information technology, natural resources, commerce, taxation and other departments at or above the county level, as well as the Guangdong Branch of the General Administration of Customs and relevant directly affiliated customs, shall register in the rare earth traceability system.
Other enterprises engaged in rare earth-related businesses are encouraged to register and use the rare earth traceability system in accordance with these measures.
Article 7 [Account Review] The operation management agency shall complete the information review within five days from the date of receipt of the registration application, and open the rare earth traceability system access rights to the units that have passed the review.
If the registration information of the units that have passed the review changes, they shall submit a change application in the rare earth traceability system within three days from the date of the information change, and the operation management agency shall review it.
Article 8 [Data reporting] Rare earth enterprises shall establish a rare earth product flow recording system, equip themselves with the necessary equipment, facilities and personnel to implement rare earth product information traceability management, truthfully record rare earth product flow information, and enter basic indicator data into the rare earth traceability system before the 10th of each month to ensure that the data information is true, accurate and complete.
Rare earth enterprises are encouraged to build internal rare earth traceability systems to improve the level of information management.
Article 9 [Traceability Coding] Rare earth enterprises with conditions are encouraged to take the lead in applying for rare earth product traceability codes through the rare earth traceability system, and adding traceability labels to each single sales unit product to achieve the traceability of rare earth products with "one item, one code". The basic indicators of the traceability code include product name, specifications, weight, etc.
Article 10 [Traceability Application] The competent departments of industry and information technology, natural resources, commerce, taxation, etc. at or above the county level, as well as the Guangdong Branch of the General Administration of Customs and relevant directly affiliated customs can make full use of the data statistical analysis function of the rare earth traceability system according to their duties, explore the value of data resources, and improve the level of information-based supervision.
Chapter III Supervision and Management
Article 11 [Daily Supervision] Rare earth enterprises shall strengthen internal management and conduct self-inspection on the implementation of rare earth product information traceability management requirements in a timely manner.
The competent departments of industry and information technology, natural resources, commerce, taxation and other departments at or above the county level, as well as the Guangdong Branch of the General Administration of Customs and relevant directly affiliated customs shall strengthen the supervision of the implementation of rare earth product information traceability management requirements by rare earth enterprises in their respective regions and conduct administrative inspections from time to time.
The Ministry of Industry and Information Technology and other relevant departments shall conduct administrative inspections from time to time on the implementation of rare earth product information traceability management requirements by rare earth enterprises across the country in accordance with the division of responsibilities.
Article 12 [Network and Data Security] Rare earth enterprises and rare earth traceability system operation and management agencies shall fulfill their obligations to protect network and data security, establish and improve the network security and data information security management system of their units, standardize data management and use permissions, adopt data classification and classification protection measures, apply commercial encryption to protect network and information security, implement risk assessment, monitoring and early warning, and incident handling requirements, standardize data processing activities, and ensure network security and data security.
Article 13 [Confidentiality Responsibility] Relevant units and personnel involved in the construction, operation, management of the rare earth traceability system and the supervision and inspection of rare earth product information traceability shall keep confidential the important sensitive data, business secrets and personal privacy known in the performance of their duties in accordance with the law and shall not disclose or illegally provide them to others.
Article 14 [Penalties] Any violation of the provisions of these Measures shall be punished by the relevant competent authorities in accordance with the provisions of the Cybersecurity Law of the People's Republic of China, the Data Security Law of the People's Republic of China, the Rare Earth Management Regulations and other laws and administrative regulations.
Chapter 4 Supplementary Provisions
Article 15 The provisions of this Regulation on the "three days" and "five days" during the review period refer to working days, excluding statutory holidays.
Article 16 The Ministry of Industry and Information Technology is responsible for interpreting this Regulation and will revise it in due course based on actual conditions. Article 17 This Regulation shall come into force on the date of promulgation.
Thank you for reading.