In the middle of January this year,Ministry of Industry and Information Technology drew up Regulations on Rare Earth Administration,Exposure Draft(referred to as Regulations)and solicited public opinions.

1.Regulations Covers Six Aspects

(1)Specifying duties and responsibilities in rare earth management

The State Council established coordination mechanism of rare earth management,studied and made major policies for rare earth management and coordinated and solved major issues in rare earth management.Authority of Industry and Information Technology of people’s government above county level are responsible for management on rare earth industry; development and reform department,public safety department,financial sector,natural resources department,ecological environment department,commercial department,emergency management department,national resources department,Customs,tax department,market supervision and administration department are responsible for their own rare earth management within their scope of duty.

(2)Specifying qualification approval system for rare earth exploiting and smelting separation investment projects

Regulations on Corporate Investment Approval and Filing Management should be followed for the qualification approval of rare earth exploiting and smelting separation investment projects.

(3)Establishing indicator management system for the total volume of rare earth exploiting and smelting separation

a).Authority of Industry and Information Technology of the State Council,jointly with development and reform department and natural resources department of the State Council,studied and decided to set up indicators of total rare earth exploiting and total rare earth smelting and separation.These indicators will be released to the public after they get approval from the State Council.

b).Authority of Industry and Information Technology and natural resources department of the State Council will fully consider all aspects to determine the utility schemes for the indicators of total volume approved by the State Council.

c).Rare earth exploiting companies and rare earth smelting and separating companies should carry out their work right according to the total volume indicators utility schemes specified by Authority of Industry and Information Technology and natural resources department of the State Council.

(4)Strengthening the whole-industry chain management in rare earth industry

a).As for circulating,it is ruled that any unit or any person should not buy or sell illegally-exploited or illegally-smeltedand-separated rare earth products.

b).As for comprehensive utilization,it is encouraged that comprehensive utilization companies use eco-friendly technologies and processes to recycle secondary resources containing rare earth.It is forbidden that comprehensive utilization companies use rare earth products other than the aforesaid secondary resources as raw materials to carry out smelting and separating activities.

c).As for product tracing,Authority of Industry and Information Technology of the State Council,jointly with natural resources department of the State Council,Customs and tax department,establishes rare earth product tracing system.Rare earth exploiting companies,rare earth smelting and separating companies and rare earth metal smelting companies should input manufacturing information,sales data and package and invoice information into such system.

d).As for export-import management,it is ruled that rare earth export-import companies should obey laws and regulations on foreign trade and export control.

e).Strategic reserves of rare earth resources and rare earth products is in effect in China.

(5)Strengthening supervision and management

a).Strengthening daily supervision.Authority of industry and information technology of people’s government above county level,jointly with public safety department,natural resources department,ecological environment department,commercial department,Customs,market supervision,tax department and emergency management,strengthens the supervision and management on companies engaged in rare earth exploiting,smelting and separating,metal smelting and comprehensive utilization.They follow the supervision model of “ dual randomness and one openness”.

b).Supervision departments are given necessary handling measures.For any suspected illegal activities discovered by authority of industry and information technology of people’s government above county level during supervision,the authority has the right to detain related rare earth products and equipment and close down the venue for producing and selling rare earth products.

(6)Defining legal liabilities

For illegal activities including exploiting rare earth and smelting and separating rare earth in violation of total volume indicator schemes,buying and selling rare earth products illegally,and violating rare earth product tracing system,using rare earth reserves without authorization,and obstructing supervision and examination,according legal liabilities will be imposed.

2.The Review on Major Policies and Major Initiatives in Our Rare Earth Industry in 2011 2019

In 2011-2019,the State Council and related ministries and commissions issued many important policies and initiatives concerning rare earth industry.Important policies include 22 Opinions on Sustainable Healthy Development of Rare Earth Industry issued by the State Council,and Access Criteria for Rare Earth Industry issued by MIIT and incorporating rare earth into Catalogue of Strategic Minerals of China.Important measures include that we have finished organizing six big rare earth groups and State Administration of Taxation adopts special invoice mechanism for rare earth.These policies have formed a policy framework to help our rare earth industry gain healthy development,and this is of great importance.The organization of six big rare earth groups marks the formation of the pattern where big groups take the lead in our rare earth industry.This has fundamentally changed the disorder before and helps to maintain an orderly development environment for rare earth industry.Times have passed and circumstances have changed.Domestic and foreign situations vary,which brings new topics and tasks to the development of China’s rare earth industry.The policies that were made before are not able to fully satisfy current demands.We are in urgent need of new programmatic documents at national level to exercise overall leadership and to guide the development of China’s rare earth industry.

Major Policies and Major Measures in Our Rare Earth Industry in 2011-2019 Are as Follows:

--- In 2011,Opinions from The State Council on Promoting Sustainable and Healthy Development for Rare Earth Industry was released.The“Opinions” puts forward that we need to enforce stricter protective exploiting policies and eco-environment protection criteria on rare earth resources,so as to improve laws and regulations on rare earth management ASAP and crack down on illegal activities; to make persistent efforts to restrain total volume and optimize stock,facilitate the strategy of big companies and big groups leading,actively advance technology innovations,improve technologies and eliminate outdated capacity,thus,as a result,promoting sustainable and healthy development for rare earth industry.Previously,Ministry of Land and Resources planned and set up the first batch of 11 rare earth mining areas of country planning in Ganzhou of Jiangxi,which is a sign to us all that improving rare earth industry concentration will become a focus in the controlling work of the country for rare earth,and encouraging merger and reorganization of advantageous companies will become one of those important measures.

---The year of 2012:

a):MIIT issued Access Criteria for Rare Earth Industry and Interim Management Measures for Announcement of Access Criteria for Rare Earth Industry.These two documents have provided policy ground for related organs and provinces(districts)to exert management on aspects including investments,resource exploiting,environmental impact assessment,credit financing and safety supervision during rare earth project construction.As of the end of 2012,documents had announced three batches of eligible companies(totally 35 companies)that satisfy the requirements of the Access Criteria.China Securities Regulatory Commission has made it clear that any company that fails to satisfy the requirements of the Access Criteria is not allowed to go public.

b):State Administration of Taxation made announcement(No.17,2012)that it would incorporate the invoices issued by rare earth companies into Chinese characters anti-counterfeiting management of VAT anti-counterfeiting tax control system,on June,1,2012.Rare earth products include rare earth minerals and rare earth smelting and separating products.Furthermore,rare earth smelting and separating products include rare-earth salts,rare earth hydrate,rare earth oxide and rare earth compounds and processing of rare earth smelting and separating products.

---The year of 2015-2016

a):MIIT,jointly with Ministry of Land and Resources and SASAC,successively completed the organization and acceptance inspection of six groups,i.e.Rare Earth of Chinalco,China Northern Rare Earth,Xiamen Tungsten,China Southern Rare Earth,Guangdong Rare Earth and China Minmetals.Organizations of the six rare earth companies have been completed,which marks the formation of a pattern where big groups take the lead in China’s rare earth industry.

b):For the purpose of safeguarding national economic safety,national security and development demands of strategic emerging industries,the State Council approved National Mineral Resource Planning(2016-2020)(Guohan No.178,2016).The Planning specifies that 24 minerals including rare earth are incorporated into strategic mineral catalogue,and rare earth is regarded as an important object for mineral resource macro regulation and supervision.The Planning also brings up the idea of establishing strategic mineral monitoring warning system,warning indicator,safety critical value and evaluation model; scientifically carrying out supply and demand analysis and resource pattern analysis for mineral products at home and abroad; improving resource safety warning ability for major international conflicts; establishing strategic mineral monitoring warning reporting system,so as to support government decisions and guide industrial development.

---In 2018,National Development and Reform Commission and MIIT successively formulated and released a collection of policies and measures to promote rare earth industry.

a):Special Management Measures for Access of Foreign Investors(Negative List)(2018)removes the restrictions on foreign investments in the field of rare earth smelting and separating.

b):Notification on Regular Announcement System for Rare Earth Mine and Smelting and Separating Companies specifies that announcement about situations of rare earth mine and smelting and separating companies should be made to the public in Q1 of each year.

c):Notification on Further Standardizing Approval Procedure of Exploration Right and Mining Right of Rare Earth Mines and Tungsten Mines further standardizes and strengthens approval procedure for exploring and mining of rare earth mines and tungsten mines.

d):Market Access Negative List(2018)rules that we need to eliminate those rare earth mine exploring projects that fail to meet the development requirements,and put limits on rare earth exploiting,mineral processing,smelting and separating projects and rare earth exploiting projects(excluding projects of rare earth companies that meet the requirements of total exploiting volume indicators).

---In 2019,National Development and Reform Commission and Ministry of Commerce released Market Access Negative List(2019)that incorporates regulations concerning rare earth.On the basis of stability and continuity,Market Access Negative List(2019)further simplifies and optimizes management measures and enriches information disclosure content.The whole List becomes more complete and market access negative list system featured by the list also gets improved.

Related rare earth regulations are as follows:①.Projects of rare earth mining,rare earth smelting and separating,rare earth deep processing should be approved by provincial-level government; ②.For elimination:mixedtype rare earth mine exploiting projects with capacity less than 20000 tons(REO)/year,bastnaesite rare earth mine exploiting projects with capacity less than 5000 tons(REO)/year,ionic type rare earth mine exploiting projects with capacity less than 500 tons(REO)/year;③.For restriction:rare earth exploiting projects(excluding projects of rare earth companies that meet the requirements of total exploiting volume indicators)and rare earth smelting and separating projects(excluding projects that meet national laws and regulations concerning energy saving and environment protection).

3.Regulations Is The Programmatic Document for The Development of Our Rare Earth Industry

The releasing of Regulations is of historic significance in our rare earth industry.It will influence the whole industry through the trend and strategies.Covering all aspects and all links in rare earth industry,the Regulations epitomizes policies and regulations before and further makes them more specified.The Regulations standardizes quality sustainable development of rare earth industry from national level,raises the industry to an unprecedented strategic height and highlights the important strategic significance of this industry.As a programmatic document for our rare earth industry,the Regulations releases a signal that our country firmly decides to standardize rare earth management and promote quality development of the industry.To be specific,it specifies duties and responsibilities in rare earth management,defines qualification approval system for rare earth exploiting and smelting and separation investment projects and set up total volume indicator management system of rare earth exploiting and smelting and separating.It reinforces whole industry chain management of rare earth industry,formulated laws and regulations in foreign trade and export control that companies engaged in rare earth product import and export should follow,consolidates supervision and management and specifies legal liabilities.