China, the world's leading supplier of rare earth elements, announced new regulations aimed at overseeing the mining, smelting, and separation of these essential minerals, which are crucial for the energy transition, according to a Reuters report.

Currently, Beijing governs rare earth mining, smelting, and separation through a quota system.

According to a statement from the Ministry of Industry and Information Technology, the updated regulations will now incorporate imported raw materials into this quota framework, following a public consultation that commenced in February.

The updated regulations follow China’s already stringent management over its rare earth industry through the quota system and reinforce its control over the supply chain.

Rare earth elements, a collection of 17 metals, are vital components in a wide array of products, including military equipment, electric vehicle motors, wind turbines, and various consumer electronics.

China's dominance in the rare earth market has become a sensitive issue, especially with the country's recent move to add several rare earth products and magnets to its export restriction list in April. This was seen as a retaliatory measure against US tariff increases.

In July, China discreetly issued its 2025 rare earth mining and smelting quotas without the customary public announcement.

The delay in releasing this year's quotas is partly due to the February proposal to incorporate imported ore into the quota system, a move that met with opposition from companies that depend on imports for their raw materials.

In a related development, Russia's exports of precious metals, including gold and silver, to China have increased significantly in the first half of the year by 80% to $1bn compared to the same period last year.

This increase coincides with a 28% rise in gold prices this year, influenced by factors such as heightened geopolitical risks, ongoing trade tensions, and strong purchasing by central banks and exchange-traded funds.