To prevent an oversupply of rare earth materials, China's 2013 rare earth mining target is only half that of 2012, at 46,900 tons. China's export quota has been around 30,000 tons since 2010 and the actual export volume has been lower due to falling demand from major customers in countries such as Japan and the US. The actual export volume in 2013 is forecast at around 60% of the export quota.
Digitimes Research predicts light and heavy rare earth exports will account for 87% and 13%, respectively, of the total 2013 export quota.
China's rare earth subsidy programs will help firms improve technology while protecting resources. On the other hand, the programs may also cause small- and medium-size firms to exit the market. This will likely increase concerns from Japan, the US, and the EU regarding the China government's control over the industry.
The average price of rare earths in 2012 fell close to 40% compared to 2011. To stop the price falls, firms adopted strategies such as production suspensions. However, falling demand in downstream sectors, and illegal mining, curbed the effects of such strategies.
China-based Baogang Rare Earth signed agreements with 12 rare earth firms in Inner Mongolia, China, to integrate light rare earth firms in northern China. Another China-based firm, Ganzhou Rare Earth, integrated major medium and heavy rare earth firms in southern China through procuring shares.
