Tianfeng Securities: Major New Regulations on Rare Earths Implemented, Supply Side Accelerates Optimization

According to the Zhitong Finance APP, Tianfeng Securities released a research report stating that the current supply side of rare earths continues to optimize, especially with the management of separation plants being clearly regulated by law. The supply side is gradually achieving accelerated integration, and in the future, more attention should be paid to the overall price elasticity of rare earths (whether due to scarcity from a supply-demand perspective or scarcity under export controls, etc.); more importantly, in the future, both the production of rare earth mines and the list of separation plants will be determined by the Ministry of Industry and Information Technology in conjunction with the Ministry of Natural Resources, which means that approval will be required. Therefore, it is essential to fully recognize the special positioning of large groups. It is recommended to view upstream rare earth companies from a medium to long-term perspective, and to pay attention to CNRE (600111.SH), ZGXT (00769), and Rnm (600259.SH), among others.

The main points of Tianfeng Securities are as follows:

Event: Release of the "Interim Measures for Total Control Management of Rare Earth Mining and Rare Earth Smelting Separation"

On August 22, 2025, the "Interim Measures for Total Control Management of Rare Earth Mining and Rare Earth Smelting Separation" (hereinafter referred to as the "Measures") were officially released. The "Measures" are based on the "Mineral Resources Law of the People's Republic of China," "Rare Earth Management Regulations," and other laws, administrative regulations, and national relevant provisions, with the core aim of strengthening the total control management of rare earth mining and rare earth smelting separation. The following points are noteworthy—

1. The direction of total control remains unchanged, and most importantly, it is clearly stated that the smelting and separation of rare earth mineral products obtained from imports and processing of other minerals will be included in the total control management. Article 3 of the "Measures" clearly stipulates that the state implements total control management over rare earth mining (including rare earth mineral products, etc.) and the smelting and separation of various rare earth mineral products (including monazite concentrate) obtained through mining, imports, and processing of other minerals. The inclusion of imported minerals in smelting management has now been formally supported by legal basis.

2. Procedures for issuing total control indicators. The Ministry of Industry and Information Technology, in conjunction with the Ministry of Natural Resources and the National Development and Reform Commission, will research and formulate annual total control indicators for rare earth mining and rare earth smelting separation based on factors such as national economic development goals, differences in national rare earth resource reserves and types, rare earth industry development, ecological protection, and market demand, and submit them for approval by the State Council.

3. Clarification of rare earth production enterprises. Rare earth production enterprises will be determined by the Ministry of Industry and Information Technology in conjunction with the Ministry of Natural Resources. Other organizations and individuals are prohibited from engaging in rare earth mining and rare earth smelting separation, except for those enterprises identified in the previous clause. This further standardizes the scope of production enterprises and strengthens compliance in the rare earth industry.

4. Rare earth product traceability information system. Rare earth production enterprises should establish a record-keeping system for the flow of rare earth products, accurately recording the flow information of rare earth products, and inputting the previous month's rare earth product flow information into the traceability information system established by the Ministry of Industry and Information Technology in conjunction with relevant departments before the 10th of each month. The industry believes that the application of the rare earth product traceability information system can standardize the industry in the process, making "gray and black rare earths" nowhere to hide, which is a strong guarantee for standardization.

Risk Warning: Risks of rare earth price fluctuations and inventory risks, risks of policy implementation falling short of expectations, risks of changes in overseas supply chains