China Rare Earth Glossary

In 2010, rare earths were designated as strategic and scarce resources in China, and their total quantity was controlled through a reserve system. This reserve action led to a significant increase in rare earth prices, resulting in widespread illegal mining and smelting activities, which caused considerable ecological damage and affected the collection of mineral resource taxes.

On May 10, 2011, the State Council released “Several Opinions on Promoting the Sustainable and Healthy Development of the Rare Earth Industry,” establishing the framework for the development of China’s rare earth enterprises. The Ministry of Industry and Information Technology proposed the “1+5” scheme to form large national rare earth groups. This initiative focused on asset optimization, mergers, and restructuring within the industry, aiming to establish a new layout of one major rare earth company in the North and five in the South.

By the end of 2014, the formation plans for Big Six rare earth groups, each led by China Northern Rare Earth (Group) High-Tech Co., Ltd., China Minmetals Corporation (Minmetals), Aluminum Corporation of China (Chinalco), China Southern Rare Earth Group Co., Ltd., Guangdong Rare Earth Industry Group Co., Ltd., and Xiamen Tungsten Co., Ltd., had all been approved. This marked the official start of the consolidation and restructuring phase for rare earth enterprises in China, beginning the creation of a new map for the future of China’s rare earth industry. The plan aimed to integrate all rare earth mines, smelting and separation enterprises nationwide by the end of 2015. By the end of 2016, the construction of the Big 6 rare earth groups was completed, with each group achieving a comprehensive layout integrating resource extraction, smelting and separation, processing applications, and technological research and development.

After the establishment of the Big Six rare earth groups, the state integrated the excess capacity of rare earths through production indicator quotas, further combating issues like illegal mining. In 2018, all rare earth mining and smelting quotas were allocated to the Big Six rare earth groups, marking the transition of state control over the rare earth industry into a systematic and normalized phase.

In December 2021, further consolidation occurred among the Big Six rare earth groups, with Minmetals, Chinalco, and Southern Rare Earth merging to officially form the state-owned China Rare Earth Group Co., Ltd. in Jiangxi Province. This consolidation reduced the Big Six rare earth groups to four: Northern Rare Earth, China Rare Earth Group, Xiamen Tungsten, and Guangdong Rare Earth.

In January 2024, China Rare Earth Group acquired the entire 100% equity of Guangdong Rare Earth. This consolidation effectively altered the industry structure, reducing the number of major rare earth groups from four to three.

The listed prices of rare earth products refer to the prices of major light rare earth oxides and metals published by Northern Rare Earth (Group) High-Tech Co., Ltd. As the largest supplier of light rare earths in China, holding over 85% of the market supply, Northern Rare Earth has significant pricing power. Its prices, guided by the Ministry of Industry and Information Technology, are executed at a unified sales price, with the pricing based on the listed prices. Northern Rare Earth’s listed prices are set monthly and are typically announced at the beginning of each month.

These listed prices are highly regarded by industry insiders as a vital indicator for both the Chinese and global rare earth market, reflecting the price trends of corresponding products in the market. To maintain market health, stability, and sustainable development, the listed price increases are usually lower than market price rises when raw material prices rapidly escalate. Therefore, during a rapid increase in rare earth prices, Northern Rare Earth’s listed prices are generally lower than market prices. Conversely, when raw material prices drop sharply, the decrease in listed prices is also less than that of market prices, making Northern Rare Earth’s listed prices generally higher than market prices during a rapid decline in rare earth prices.

The listed prices have a consolidating effect on market trends: after the announcement of the listed prices, their fluctuations tend to consolidate the market prices at that time. However, this market-stabilizing effect is not always achieved, as the actual supply and demand in the market have a greater impact on prices than the listed prices.

The term “rare earth concentrate” refers to a product distinct from “rare earth ore.” In concentrates, the rare earth elements remain in forms similar to those in the ore, typically as compounds insoluble in water and resistant to dissolution under normal conditions of inorganic acids. Rare earth concentrate is a high-grade rare earth product obtained through the beneficiation of raw rare earth ore. In the concentrate, rare earth elements generally exist as water-insoluble carbonates, fluorides, phosphates, oxides, or silicates. To extract them, various chemical processes are employed to convert these elements into compounds soluble in water or inorganic acids. The extraction involves steps like dissolution, separation, purification, concentration, or calcination to produce various mixed rare earth compounds. Rare earth concentrate prices refer to the related transaction prices of rare earth concentrates as outlined in the “Rare Earth Concentrate Supply Contract” signed between China Northern Rare Earth (Group) High-tech Co., Ltd. and Bao Gang United Steel Co. These prices have a significant impact on the rare earth market prices and sentiment.

Notes:

• We recommend you to view the price trend on PC.
• Rare earth price index chart enable to pan horizontally and vertically by dragging, and to zoom in and out by scrolling. Return to the original pan and zoom level by right clicking on the rare earth price index chart.

The rare earth quotas, referring to the total control indicators for rare earth mining, smelting, and separation, are established and released by the Chinese government. To regulate the management of the rare earth industry, ensure the rational development and utilization of rare earth resources, promote the sustained and healthy development of the rare earth industry, protect the ecological environment and resource security, competent units such as the State Council and the Ministry of Industry and Information Technology have successively introduced regulations since 2006. These include “Several Opinions on Promoting the Sustainable and Healthy Development of the Rare Earth Industry”, “Interim Measures for the Management of Directive Production Plans for Rare Earths”, and “Rare Earth Management Regulations (Draft for Comment)”, which clarify the directive production plans for rare earths, later referred to as the total control plan for rare earths. This involves the management of total indicators for rare earth mining, smelting, and separation. The competent departments of industry and information technology of the State Council, in conjunction with the departments of development and reform, natural resources, etc., will formulate the next year’s total mining quota for rare earths and the total quota for rare earth smelting and separation based on the development plan of the rare earth industry, mineral resource planning, and national industrial policy. These quotas consider factors such as environmental carrying capacity, resource potential, market demand, and the technical level of mining and smelting separation. After approval by the State Council, these quotas are announced to the public.

Article 1: To effectively protect and rationally develop and utilize rare earth resources, promote high-quality development of the rare earth industry, maintain ecological security, and ensure national resource and industrial security, this regulation is formulated in accordance with relevant laws.

Article 2: This regulation applies to activities within the territory of the People’s Republic of China involving the mining, smelting and separation, metal smelting, comprehensive utilization, product circulation, import, and export of rare earths.

Article 3: The management of rare earths shall implement the policies and strategic decisions of the Party and the state, emphasize both resource protection and utilization, and adhere to the principles of coordinated planning, ensuring safety, technological innovation, and green development.

Article 4: Rare earth resources are owned by the state, and no organization or individual may encroach upon or damage them. The state shall legally strengthen the protection of rare earth resources and implement protective mining practices.

Article 5: The state implements unified planning for the development of the rare earth industry. The competent department of industry and information technology under the State Council, in conjunction with relevant departments, shall lawfully compile and implement the development plan for the rare earth industry.

Article 6: The state encourages and supports the research and application of new technologies, processes, products, materials, and equipment in the rare earth industry. It aims to continuously enhance the level of development and utilization of rare earth resources and promote the high-end, intelligent, and green development of the rare earth industry.

Article 7: The competent department of industry and information technology under the State Council is responsible for the management of the national rare earth industry, developing and implementing management policies and measures for the rare earth industry. Other relevant departments under the State Council, such as the department of natural resources, are responsible for rare earth management within their respective duties. Local people’s governments at or above the county level are responsible for the management of rare earths in their respective areas. The relevant competent departments of industry and information technology, natural resources, etc., at or above the county level shall manage rare earths according to their respective duties.

Article 8: The competent department of industry and information technology under the State Council, in conjunction with relevant departments, shall determine the enterprises engaged in rare earth mining, smelting and separation, and announce them to the public. Apart from the enterprises identified in accordance with this paragraph, no other organizations or individuals may engage in rare earth mining, smelting and separation.

Article 9: Rare earth mining enterprises must obtain mining rights and mining permits in accordance with the laws, administrative regulations on mineral resource management, and relevant national regulations. Investments in rare earth mining, smelting and separation, and other projects must comply with the laws, administrative regulations, and national regulations governing investment projects.

Article 10: The state, considering factors such as the reserves and types of rare earth resources, industrial development, ecological protection, and market demand, implements total quantity control over rare earth mining, smelting and separation, and optimizes dynamic management. Specific measures shall be formulated by the competent department of industry and information technology under the State Council in conjunction with the departments of natural resources, development and reform, and other relevant departments. Rare earth mining, smelting and separation enterprises must strictly comply with the national regulations on total quantity control management.

Article 11: The state encourages and supports enterprises to use advanced and appropriate technologies and processes for the comprehensive utilization of secondary rare earth resources. Enterprises engaged in the comprehensive utilization of rare earths must not use rare earth mineral products as raw materials for production activities.

Article 12: Enterprises engaged in rare earth mining, smelting and separation, metal smelting, and comprehensive utilization must comply with the laws and regulations concerning mineral resources, energy conservation, environmental protection, clean production, safety production, and fire protection. They must take reasonable measures for environmental risk prevention, ecological protection, pollution control, and safety protection to effectively prevent environmental pollution and production safety accidents.

Article 13: No organization or individual may purchase, process, sell, or export rare earth products that have been illegally mined or illegally smelted and separated.

Article 14: The competent department of industry and information technology under the State Council, in conjunction with the departments of natural resources, commerce, customs, and taxation, shall establish a traceability information system for rare earth products to enhance the management of the entire traceability process of rare earth products and promote data sharing among relevant departments. Enterprises engaged in rare earth mining, smelting and separation, metal smelting, comprehensive utilization, and export of rare earth products must establish a system for recording the flow of rare earth products, accurately record the information on the flow of rare earth products, and enter it into the rare earth product traceability information system.

Article 15: The import and export of rare earth products and related technologies, processes, and equipment must comply with the relevant laws and administrative regulations governing foreign trade and import and export management. If subject to export control, they must also comply with the laws and administrative regulations on export controls.

Article 16: The state shall improve the rare earth reserve system by combining physical reserves with mineral reserves. Rare earth physical reserves will integrate government and enterprise reserves, continuously optimizing the variety and quantity of reserve stocks. Specific methods will be formulated by the State Council’s development and reform and finance departments in conjunction with the competent department of industry and information technology, and the grain and material reserve department. The competent department of natural resources under the State Council, in conjunction with relevant departments, will demarcate rare earth resource reserve areas based on the need to ensure the security of rare earth resources, considering factors such as resource reserves, distribution, and importance, and will legally strengthen supervision and protection. Specific methods will be formulated by the competent department of natural resources of the State Council in conjunction with relevant departments.

Article 17: Rare earth industry organizations should establish and improve industry standards, strengthen industry self-regulation, guide enterprises to operate legally and with integrity, and promote fair competition.

Article 18: The competent department of industry and information technology and other relevant departments shall supervise and inspect activities such as the mining, smelting and separation, metal smelting, comprehensive utilization, product circulation, and import and export of rare earths, in accordance with relevant laws, regulations, and the provisions of these regulations, according to their responsibilities, and deal with illegal acts in a timely manner according to law. When conducting supervision and inspections, supervisory and inspection departments are authorized to take the following measures:

1. Require the inspected entities to provide relevant documents and information;
2. Question the inspected entities and their relevant personnel, requiring them to explain matters related to the supervision and inspection;
3. Enter places suspected of illegal activities to conduct investigations and collect evidence;
4. Seize rare earth products and tools, equipment related to illegal activities, and seal off the premises involved in illegal activities;
5. Other measures prescribed by laws and administrative regulations.

The inspected entities and their relevant personnel must cooperate, provide relevant documents and information truthfully, and must not refuse or obstruct.

Article 19: When conducting supervision and inspections, the supervisory and inspection personnel must consist of no fewer than two people and must present valid administrative law enforcement credentials. Staff members of the supervisory and inspection departments have a duty to keep confidential any state secrets, commercial secrets, and personal information they learn about during the supervision and inspection process.

Article 20: Violations of these regulations that involve any of the following behaviors will be penalized by the competent department of natural resources according to the law:

1. Rare earth mining enterprises mine rare earth resources without obtaining mining rights or mining permits, or mine rare earth resources beyond the registered mining area;
2. Organizations and individuals other than rare earth mining enterprises engage in rare earth mining.

Article 21: If rare earth mining enterprises and rare earth smelting and separation enterprises violate the total quantity control management regulations by mining or smelting and separating rare earths, the competent departments of natural resources, industry, and information technology shall, according to their responsibilities, order corrections, confiscate the illegally produced rare earth products and illegal gains, and impose a fine of 5 to 10 times the illegal gains. If there are no illegal gains or the illegal gains are less than 500,000 yuan, a fine of between 1 million and 5 million yuan will be imposed; in severe cases, they may order the suspension of production and business and legally discipline the main responsible persons, directly responsible managers, and other directly responsible personnel.

Article 22: Violations of these regulations that involve any of the following behaviors will be ordered by the competent department of industry and information technology to stop the illegal activities, confiscate the illegally produced rare earth products and illegal gains, as well as the tools and equipment used directly for the illegal activities, and impose a fine of 5 to 10 times the illegal gains. If there are no illegal gains or the illegal gains are less than 500,000 yuan, a fine of between 2 million and 5 million yuan will be imposed; in severe cases, the market supervision and administration department will revoke its business license:

1. Organizations and individuals other than rare earth smelting and separation enterprises engage in smelting and separation;
2. Enterprises involved in the comprehensive utilization of rare earths engage in production activities using rare earth mineral products as raw materials.

Article 23: Violations of these regulations that involve purchasing, processing, or selling illegally mined or illegally smelted and separated rare earth products will be ordered by the competent department of industry and information technology, in conjunction with relevant departments, to stop the illegal activities. They will confiscate the illegally purchased, processed, or sold rare earth products and illegal gains, as well as the tools and equipment used directly for the illegal activities, and impose a fine of 5 to 10 times the illegal gains. If there are no illegal gains or the illegal gains are less than 500,000 yuan, a fine of between 500,000 and 2 million yuan will be imposed; in severe cases, the market supervision and administration department will revoke its business license.

Article 24: If the import or export of rare earth products and related technologies, processes, or equipment violates relevant laws, administrative regulations, or the provisions of these regulations, the competent commercial department, customs, and other relevant departments shall impose penalties in accordance with their responsibilities and according to law.

Article 25: Enterprises engaged in rare earth mining, smelting and separation, metal smelting, comprehensive utilization, and the export of rare earth products that fail to accurately record the flow of rare earth products and enter this information into the rare earth product traceability system will be ordered by the competent department of industry and information technology and other relevant departments, according to their assigned responsibilities, to make corrections. These enterprises will be fined between 50,000 and 200,000 yuan; those that refuse to correct will be ordered to cease production and operations. The main responsible persons, directly responsible managers, and other directly responsible personnel will be fined between 20,000 and 50,000 yuan, and the enterprise will be fined between 200,000 and 1,000,000 yuan.

Article 26: If anyone refuses or obstructs supervisory and inspection departments from lawfully performing their supervisory and inspection duties, the supervisory and inspection departments shall order them to make corrections. Warnings shall be issued to the main responsible persons, directly responsible managers, and other directly responsible personnel, and a fine of between 20,000 and 100,000 yuan will be imposed on the enterprise. If they refuse to correct the issue, they will be ordered to cease production and operations. Fines of between 20,000 and 50,000 yuan will be imposed on the main responsible persons, directly responsible managers, and other directly responsible personnel, and a fine of between 100,000 and 500,000 yuan will be imposed on the enterprise.

Article 27: Enterprises engaged in rare earth mining, smelting and separation, metal smelting, and comprehensive utilization that violate laws and regulations related to energy conservation, environmental protection, clean production, safety production, and fire protection will be penalized by the relevant departments according to their responsibilities. Illegal and irregular activities of enterprises engaged in rare earth mining, smelting and separation, metal smelting, comprehensive utilization, and the import and export of rare earth products will be recorded in credit records and included in the national credit information system by the relevant departments according to law.

Article 28: Staff members of the supervisory and inspection departments who abuse their authority, neglect their duties, or engage in favoritism and fraud in the management of rare earths shall be disciplined according to law.

Article 29: Violations of the provisions of these regulations that constitute offenses against public order management shall be subject to administrative penalties according to law; if they constitute crimes, criminal responsibility shall be pursued in accordance with the law.

Article 30: The following terms used in these regulations are defined as:

Rare earths refer to a collective term for elements such as lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lutetium, scandium, and yttrium.

Smelting and separation refers to the production process that processes rare earth mineral products to produce various types of single or mixed rare earth oxides, salts, and other compounds.

Metal smelting refers to the production process of producing rare earth metals or alloys using single or mixed rare earth oxides, salts, and other compounds as raw materials.

Secondary rare earth resources refer to solid waste that can be processed to make the contained rare earth elements reusable, including but not limited to rare earth permanent magnet scrap, spent permanent magnets, and other waste containing rare earth elements.

Article 31: For the management of rare metals other than rare earths, the relevant competent departments of the State Council may refer to the provisions of these regulations for implementation.

Article 32: These regulations shall come into effect on October 1, 2024.

Original source: https://www.gov.cn/zhengce/content/202406/content_6960152.htm