China marginally decreases rare earth export quotas

BEIJING – China’s Ministry of Commerce has announced a second batch of rare earth export quotas for 2014 but shows no signs of expanding availability despite increasing global demand for the minerals. The export quota includes 13,691 metric tonnes for light rare earths, down 130 tonnes from last year, and 1,809 tonnes of medium and heavy rare earths, up 130 tonnes from last year. Overall, the total export quota is 30, 610 tonnes, down 389 tonnes from last year.

The announcement puts an end to rumours that the quota system will be scrapped.

In late March the World Trade Organization (WTO) ruled that China had acted inconsistently with WTO rules with regard to export measures imposed on rare earths. After the WTO ruling, Chinese Government bodies began to discuss tax changes for the industry for the second half of the year.

In the past few years, global demand for rare earths has been relatively low, but demand has been recently on the rise. In 2011, 52% of the quota was used compared to 72% in 2012. The developments have led some Chinese analysts to believe the quota system will be in place until at least 2015, but it is unclear what effect global rising demand will have on the incentive to change regulations.