China tightens rules for rare earths mining and refining, spells out fines for breaches

China has issued a raft of regulations to tighten management of rare earths production, elements that are playing an ever-important role in the global technology race.

In a document released on Saturday, the State Council said the new rules would come into effect on October 1.

The regulation spells out that the resources belong to the state and that "no organisation or individual may encroach upon or damage" them.

Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.

To improve oversight of the industrial chain, government agencies will coordinate and manage the mining and refining of the ores and ensure that the products can be traced.

The regulation is designed to protect and "rationally develop" rare earth resources while safeguarding the environment and securing the country's resources, according to the document.

China is the world's top producer of rare earth elements, a group of more than a dozen metals essential to modern technologies ranging from electric vehicles to wind turbines, robots and military weapons.

The country is also a leader in technology to refine rare earths, which require intense processing to produce usable material.

In recent years, China has banned the export of rare earth extraction and separation technologies as well as technology to make rare earth magnets. In an article in November, the country's top anti-espionage agency highlighted rare earths as strategic mineral resources that were "directly related to national security".

According to the new regulation, the amount of mining and refining of the resources would be determined by factors including the resources' reserves, industrial development, environmental protection, and market demand.

Companies that breach mining and processing regulations may be fined between five to 10 times the amount of their illegal gains. The fines could be up to 5 million yuan (US$687,000) if their illegal gains were less than 500,000 yuan, the document said.

Companies engaged in rare earths' mining and refining, and export of rare earth products, are required to record the flow of the products, and update a tracking system to ensure they can be traced.

Violating these rules could result in fines of up to 200,000 yuan, and those who fail to rectify omissions when ordered could be fined up to 1 million yuan.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2024. South China Morning Post Publishers Ltd. All rights reserved.