Draft rare-earth rule aims at high-quality development, doesn’t target US: MIIT
Published: Mar 01, 2021 02:52 PM
A worker manages a rare-earth solution at the Youli Science and Technology Development Company in Ganzhou on Friday. Photo: Li Hao/GT

A worker manages a rare-earth solution at the Youli Science and Technology Development Company in Ganzhou on Friday. Photo: Li Hao/GT

The stock market rallied on Monday after China's industry ministry said that a draft rare-earth management rule aimed at high-quality industry development doesn't target the US.

A gauge of 58 rare-earth related stocks rallied over 5.54 percent on the A-share market on Monday, with seven stocks closing 10 percent higher -- the daily limit.

The Ministry of Industry and Information Technology (MIIT) said on Monday during a press briefing that China's release of a draft rare-earth management rule in January aims at standardizing the industry in line with long-term development and market demand, in response to speculation that China is likely to impose restrictions on rare-earth exports to the US.

"China's rare earths don't sell at a 'rare' price, they sell at an 'earth' price," Xiao Yaqing, minister of the MIIT, said.

Xiao noted that due to strong market demand, some Chinese rare-earth enterprises pursued a strategy of price-based competition, leading to a downward spiral of prices and waste of these valuable resources.

The hasty and often high-risk mining by a number of enterprises has created environmental protection problems affecting the lives of local residents, and led to the inefficient utilization of resources, he added.

"Economic globalization is a major trend. We need to work together to meet the needs for resources, energy and products in the process of economic and market development. I think that this is mainly about promoting healthier and more sustainable development, in view of our current problems," he said.

The draft regulation includes 29 clauses, clarifying a quota control regime for rare-earth mining, smelting and separation, and for the approval of investment in rare earths. It also emphasizes stronger management of the industry chain and supervision, according to the ministry.

Liu Enqiao, a senior energy analyst at the Beijing-based Anbound Consulting, said the draft regulation is not China's card against the US but is based on its own need to upgrade the sector and encourage the enterprises involved to tap into more high-end, value-added production instead of exporting rare-earth ore at low prices.

"China has been working hard to add value in the production chain of rare-earth products. The proportion of rare earths used in high-tech fields has been increasing year by year, such as LCD panels and aviation engines," Liu told the Global Times.