There are no signs that China will restrict its rare earth exports in the near term, despite market discussions outside of China after the country published a draft of rare earth industry regulations in January and announced an export control law in November.
"The rare earth industry regulations are designed to let the market play a decisive role in allocating resources, and are in accordance with the long-term development strategy and market demand for rare earths, as well as the problems existing in the industry's development," said Xiao Yaqing, minister of China's industry and information technology (MIIT), at a press briefing today.
"People in some countries have said China is or will restrict rare earth exports, but most (of the rare earths) they have bought are currently from China," Xiao added.
The other reasons for the government to formulate the industry regulations include environmental issues caused by rare earth mining and production and the "unreasonably" low prices at which China's rare earths are sold, according to Xiao.
The Chinese government also hopes the regulations will encourage domestic rare earth producers to accelerate the development of higher value-added products via technological innovation and stop building redundant projects for low-end products, Xiao said.
The MIIT in January issued a draft of rare earth control regulations and sought public comment, with the feedback deadline on 15 February. The regulation draft aims to strengthen operational management in exploring, smelting and processing rare earths, utilise and to develop rare earth resources orderly and drive high-quality development for the rare earth industry.
The Chinese government on 19 October introduced export controls legislation that could restrict access to critical materials and technologies. There have been market discussions outside of China that the law's focus on controlling exports of military and technological items related to national security could affect products such as rare earths and other metals used in sensitive technology applications, either directly or through finished/semi-finished products.
But the country has continued to ship rare earths overseas, according to officials at major export firms that have not received official notification that rare earths have been included in the control list.
China exported more rare earth permanent magnetic materials in 2020 on higher demand from Asia-Pacific. Shipments to the US rose by 62.8pc year on year in December.
China accounts for more than 90pc of global rare earth supply.
