China hikes half-year rare earth output quotas to record level

China on Friday hiked its rare earth output quotas for the first half of the year by more than 27% to record levels, potentially easing concerns of supply restrictions after a stellar price rally for the group of prized minerals.

China is the world's dominant producer of rare earths, which are used in consumer electronics and military equipment.

The release of the quotas follows a report this week in the Financial Times that China was exploring curbing exports of rare earths that are crucial to US defence contractors.

The rare earth mining output quota for the first half of 2021 has been set at 84,000 tonnes, a joint statement from China's Ministry of Industry and Information Technology (MIIT) and the Ministry of Natural Resources said. That is up 27.2% from 66,000 tonnes a year earlier.

The quota for rare earth smelting and separation - or the processing of rare earth ore into material that can be used by manufacturers - has been set at 81,000 tonnes, up 27.6% from the first half of 2020.

The quotas are typically issued twice a year.

Prices for rare-earth magnet inputs terbium oxide, dysprosium oxide and praseodymium-neodymium (PrNd) oxide in China have reached multi-year highs on the back of strong demand and concerns Beijing will seek to impose export controls.