BEIJING ( TheStreet) -- China's mining companies were told Thursday to boost their combined output of rare earths to the highest level in five years.
The government order to increase production 13% from last year's level is likely to hold down near-term prices for the hard-to-find metals used in all sorts of high-tech gear, from lasers to hybrid cars.
But the latest annual rare earths quota affecting state-owned mining companies such as China Minmetals, Baotou Steel Rare Earth and Aluminum Corp. of China (ACH) has put more pressure on their global competitors such as America's Molycorp (MCP) and Australia's Lynas (LYSCF).
China's mines churn out most of the world's 17 types of rare earth metals. Estimates of the country's global market share in recent years have ranged from 60% to 90%. This dominance sparked a dispute with other countries over quotas and export limits imposed by Beijing in 2010. The row ended with a World Trade Organization ruling in March against China.
Most of these metals with quirky names such as ytterbium and europium are sold to China-based manufacturers, including multinationals. But exports are apparently increasing. The industry data provider Chinese Rare Earth Information Net reported a 19% year-on-year jump in rare earth export licenses to about 800 awarded to Shanghai companies between January and May.
On Thursday, the Ministry of Land and Resources set the 2014 nationwide rare earths quota at 105,000 metric tons, up from 93,800 last year. The ministry also set breakout quotas for individual provinces. Also, it announced mine output quotas for other limited-use metals such as tungsten and antimony.