On December 27, 2011 the Chinese Ministry of Commerce announced the first round of allocations of rare-earth export quotas for 2012, to individual companies operating in China. The total export quotas allocated during this first round come to 24,904 t of rare earths. Before we get into more specifics with the numbers, it is important to note that this announcement was unusual for three reasons:
- The Ministry issued separate quota allocations for light (LRE) and medium / heavy (M/HRE) rare earth products, and not just for rare earths as a whole. We’ve been anticipating this change for some time, based on industry chatter from within China, but 2012 marks the first time, to my knowledge, that these separate allocations have been rolled out;
- Also for the first time (again, to my knowledge), the Ministry clearly telegraphed the intended TOTAL export quota for the entire year, prior to making the usual follow up allocation announcement next summer; and
- The Ministry separated individual companies into two groups – the first group received confirmed quota allocations, while the second received only provisional allocations. Companies were placed into one of these groups based on their progress towards implementing new pollution control regulations, with the latter group only getting their allocated quotas if they meet the various requirements by July 2012. Companies who fail to meet the new requirements, will have their quotas re-allocated to other companies.
In the announcement from the Ministry, it was stated that the first round of quota allocations (totaling 24,904 t) will represent 80% of the quota allocations for 2012, which indicates that the total for the coming year will be 31,130 t of rare earths, slightly higher than last year. Here’s how the two groups of allocations break down:
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