China's " Rare Earth Management Regulations " will come into effect on October 1

Order of the State Council of the People's Republic of China

No. 785

The "Rare Earth Management Regulations" were adopted at the 31st Executive Meeting of the State Council on April 26, 2024, and are promulgated and will come into effect on October 1, 2024.

Prime Minister Li Qiang

June 22, 2024

Rare Earth Management Regulations

Article 1 These Regulations are formulated by relevant laws to effectively protect and rationally develop and utilize rare earth resources, promote the high-quality development of the rare earth industry, maintain ecological security, and ensure national resource security and industrial security.

Article 2 These Regulations shall apply to activities such as mining, smelting, and separation, metal smelting, comprehensive utilization, product circulation, and import and export of rare earths within the territory of the People's Republic of China.

Article 3 Rare earth management work shall implement the lines, principles, policies, decisions, and arrangements of the Party and the State, adhere to the principle of giving equal importance to protecting resources and developing and utilizing them, and follow the principles of overall planning, ensuring safety, scientific and technological innovation, and green development.

Article 4 Rare earth resources belong to the State; no organization or individual may encroach upon or destroy rare earth resources.

The state strengthens the protection of rare earth resources by the law and implements protective mining of rare earth resources.

Article 5 The State implements a unified plan for the development of the rare earth industry. The competent Department of Industry and Information Technology of the State Council shall, together with relevant departments of the State Council, formulate and organize the implementation of the development plan for the rare earth industry by the law.

Article 6 The state encourages and supports the research and development and application of new technologies, new processes, new products, new materials, and new equipment in the rare earth industry, continuously improves the level of development and utilization of rare earth resources, and promotes the high-end, intelligent and green development of the rare earth industry.

Article 7 The State Council's industrial and information technology department is responsible for the management of the rare earth industry nationwide, and studies formulate and organize the implementation of rare earth industry management policies and measures. The State Council's natural resources department and other relevant departments are responsible for rare earth management-related work within their respective responsibilities.

The local people's governments at or above the county level are responsible for the management of rare earths in their respective regions. The relevant competent departments of the local people's governments at or above the county level, such as industry and information technology and natural resources, shall perform the management of rare earths by their respective responsibilities.

Article 8 The industrial and information technology department of the State Council shall, together with relevant departments of the State Council, determine rare earth mining enterprises and rare earth smelting and separation enterprises and announce them to the public.

Except for enterprises determined by the first paragraph of this Article, other organizations and individuals may not engage in rare earth mining and rare earth smelting and separation.

Article 9 Rare earth mining enterprises shall obtain mining rights and mining licenses by mineral resources management laws, administrative regulations, and relevant national regulations.

Investment in rare earth mining, smelting, and separation projects must comply with the laws, administrative regulations, and relevant national provisions on investment project management.

Article 10 The State implements total quantity control over rare earth mining and rare earth smelting and separation, and optimizes dynamic management, based on factors such as rare earth resource reserves and differences in types, industrial development, ecological protection, and market demand. Specific measures shall be formulated by the State Council’s industrial and information technology department in conjunction with the State Council’s natural resources, development and reform departments, and other departments.

Rare earth mining enterprises and rare earth smelting and separation enterprises should strictly abide by the relevant national total amount control management regulations.

Article 11 The state encourages and supports enterprises to use advanced and applicable technologies and processes to comprehensively utilize secondary rare earth resources.

Rare earth comprehensive utilization enterprises are not allowed to engage in production activities using rare earth minerals as raw materials.

Article 12 Enterprises engaged in rare earth mining, smelting and separation, metal smelting, and comprehensive utilization shall abide by the relevant laws and regulations on mineral resources, energy conservation and environmental protection, clean production, production safety, and fire protection, and adopt reasonable environmental risk prevention, ecological protection, pollution prevention, and control and safety protection measures to effectively prevent environmental pollution and production safety accidents.

Article 13 No organization or individual may purchase, process, sell, or export rare earth products that have been illegally mined or illegally smelted and separated.

Article 14 The industrial and information technology department of the State Council shall, together with the natural resources, commerce, customs, taxation, and other departments of the State Council, establish a rare earth product traceability information system, strengthen the traceability management of rare earth products throughout the entire process, and promote data sharing among relevant departments.

Enterprises engaged in rare earth mining, smelting and separation, metal smelting, comprehensive utilization, and export of rare earth products shall establish a rare earth product flow record system, truthfully record the flow information of rare earth products, and enter it into the rare earth product traceability information system.

Article 15 The import and export of rare earth products and related technologies, processes, and equipment shall comply with the relevant laws and administrative regulations on foreign trade and import and export management. For export-controlled items, they shall also comply with the export control laws and administrative rules.

Article 16 The State shall improve the rare earth reserve system by combining physical reserves with reserves at mineral deposits.

The physical reserve of rare earths is implemented by combining government reserves with enterprise reserves, and the structure and quantity of reserve varieties are continuously optimized. The specific measures shall be formulated by the Development and Reform Commission and the Finance Department of the State Council together with the competent departments of industry and information technology, and the grain and material reserve departments.

The natural resources department of the State Council, together with relevant departments of the State Council, shall designate rare earth resource reserves based on the need to ensure the safety of rare earth resources, taking into account factors such as resource reserves, distribution, and importance, and strengthen supervision and protection by the law. Specific measures shall be formulated by the natural resources department of the State Council together with relevant departments of the State Council.

Article 17 Rare earth industry organizations shall establish and improve industry norms, strengthen industry self-discipline management, guide enterprises to abide by the law and operate with integrity, and promote fair competition.

Article 18 The competent industrial and information technology departments and other relevant departments (hereinafter collectively referred to as the supervisory and inspection departments) shall supervise and inspect the mining, smelting and separation, metal smelting, comprehensive utilization, product circulation, import and export of rare earth by the relevant laws and regulations and the provisions of these Regulations and their division of responsibilities, and deal with illegal acts promptly by the law.

The supervisory and inspection departments shall have the right to take the following measures when conducting supervisory and inspection:

(1) Requesting the inspected unit to provide relevant documents and materials;

(2) Questioning the inspected unit and its relevant personnel and requiring them to explain circumstances related to the matters under supervision and inspection;

(3) Entering places suspected of illegal activities to conduct investigations and collect evidence;

(iv) Seize rare earth products, tools, and equipment related to illegal activities and seal off the sites where illegal activities are taking place;

(5) Other measures prescribed by laws and administrative regulations.

The inspected units and their relevant personnel shall cooperate, provide relevant documents and materials truthfully, and shall not refuse or obstruct.

Article 19 When the supervisory and inspection department conducts supervisory and inspection, there shall be no less than two supervisory and inspection personnel, and they shall produce valid administrative law enforcement certificates.

Staff members of supervisory and inspection departments must keep confidential the state secrets, commercial secrets, and personal information learned during supervision and inspection.

Article 20 Anyone who violates the provisions of these Regulations and commits any of the following acts shall be punished by the competent Department of Natural Resources by the law:

(1) A rare earth mining enterprise mines rare earth resources without obtaining a mining right or mining license, or mines rare earth resources beyond the mining area registered for the mining right;

(2) Organizations and individuals other than rare earth mining enterprises engage in rare earth mining.

Article 21 Where rare earth mining enterprises and rare earth smelting and separation enterprises engage in rare earth mining, smelting, and separation in violation of the total volume control and management provisions, the competent departments of natural resources and industry and information technology shall, by their respective responsibilities, order them to make corrections, confiscate the illegally produced rare earth products and illegal gains, and impose a fine of not less than five times but not more than ten times the illegal gains; if there are no illegal gains or the illegal gains are less than RMB 500,000, a fine of not less than RMB 1 million but not more than RMB 5 million shall be imposed; where the circumstances are serious, they shall be ordered to suspend production and business operations, and the principal person in charge, the directly responsible supervisor and other directly responsible persons shall be punished by the law.

Article 22 Any violation of the provisions of these Regulations that commits any of the following acts shall be ordered by the competent industrial and information technology department to cease the illegal act, confiscate the illegally produced rare earth products and illegal proceeds, as well as the tools and equipment directly used for illegal activities, and impose a fine of not less than 5 times but not more than 10 times the illegal proceeds; if there are no illegal proceeds or the illegal proceeds are less than RMB 500,000, a fine of not less than RMB 2 million but not more than RMB 5 million shall be imposed; if the circumstances are serious, the market supervision and management department shall revoke its business license:

(1) Organizations or individuals other than rare earth smelting and separation enterprises engage in smelting and separation;

(2) Rare earth comprehensive utilization enterprises use rare earth minerals as raw materials for production activities.

Article 23 Anyone who violates the provisions of these Regulations by purchasing, processing, or selling illegally mined or illegally smelted and separated rare earth products shall be ordered by the competent industrial and information technology department together with relevant departments to stop the illegal behavior, confiscate the illegally purchased, processed or sold rare earth products and illegal gains and tools and equipment directly used for illegal activities, and impose a fine of not less than 5 times but not more than 10 times the illegal gains; if there are no illegal gains or the illegal gains are less than 500,000 yuan, a fine of not less than 500,000 yuan but not more than 2 million yuan shall be imposed; if the circumstances are serious, the market supervision and management department shall revoke its business license.

Article 24 The import and export of rare earth products and related technologies, processes, and equipment in violation of relevant laws, administrative regulations, and the provisions of these Regulations shall be punished by the competent commerce department, customs, and other relevant departments by their duties and by the law.

Article 25: If an enterprise engaged in rare earth mining, smelting and separation, metal smelting, comprehensive utilization, and export of rare earth products fails to truthfully record the flow information of rare earth products and enter it into the rare earth product traceability information system, the industrial and information technology department, and other relevant departments shall order it to correct the problem by their division of responsibilities and impose a fine of not less than RMB 50,000 yuan but not more than RMB 200,000 yuan on the enterprise; if it refuses to correct the problem, it shall be ordered to suspend production and business, and the main person in charge, the directly responsible supervisor and other directly responsible persons shall be fined not less than RMB 20,000 yuan but not more than RMB 50,000 yuan, and the enterprise shall be fined not less than RMB 200,000 yuan but not more than RMB 1 million.

Article 26 Anyone who refuses or obstructs the supervisory and inspection department from performing its supervisory and inspection duties by the law shall be ordered by the supervisory and inspection department to make corrections, and the principal person in charge, the directly responsible supervisor, and others directly responsible persons shall be given a warning, and the enterprise shall be fined not less than RMB 20,000 yuan but not more than RMB 100,000 yuan; if the enterprise refuses to make corrections, it shall be ordered to suspend production and business, and the principal person in charge, the directly responsible supervisor and other directly responsible persons shall be fined not less than RMB 20,000 yuan but not more than RMB 50,000 yuan, and the enterprise shall be fined not less than RMB 100,000 yuan but not more than RMB 500,000 yuan.

Article 27: Enterprises engaged in rare earth mining, smelting and separation, metal smelting, and comprehensive utilization that violate relevant laws and regulations on energy conservation and environmental protection, clean production, production safety, and fire protection shall be punished by relevant departments by their duties and laws.

The illegal and irregular behaviors of enterprises engaged in rare earth mining, smelting and separation, metal smelting, comprehensive utilization, and import and export of rare earth products shall be recorded in the credit records by relevant departments by the law and included in the relevant national credit information system.

Article 28 Any staff member of the supervisory and inspection department who abuses his power, neglects his duties, or engages in malpractice for personal gain in the management of rare earths shall be punished according to law.

Article 29 Anyone who violates the provisions of this Regulation and constitutes an act of violation of public security management shall be subject to public security management punishment by the law; if it constitutes a crime, criminal liability shall be pursued by the law.

Article 30 The following terms in these Regulations have the following meanings:

Rare earth refers to the general term for elements such as lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lutetium, scandium, and yttrium.

Smelting and separation refers to the production process of processing rare earth minerals into various single or mixed rare earth oxides, salts, and other compounds.

Metal smelting refers to the production process of producing rare earth metals or alloys using single or mixed rare earth oxides, salts, and other compounds as raw materials.

Rare earth secondary resources refer to solid wastes that can be processed so that the rare earth elements they contain can have new use value, including but not limited to rare earth permanent magnet waste, waste permanent magnets, and other waste containing rare earths.

Rare earth products include rare earth minerals, various rare earth compounds, various rare earth metals and alloys, etc.

Article 31 The relevant competent departments of the State Council may refer to the relevant provisions of these Regulations for the management of rare metals other than rare earths.

Article 32 This Regulation shall come into force on October 1, 2024.