Chinese top authority has vowed to severely punish malpractice in the mining, production and circulation of rare earths, amid fears of the country’s rare earth exports to lose control after implementation of World Trade Organization ruling in the next year.

On October 11th, China’s Ministry of Industry and Information Technology (MIIT) released on its website a statement titled “Letter of the Ministry of Industry and Information Technology, the Ministry of Public Security, the Ministry of Land and Resources, the Ministry of Environmental Protection, the General Administration of Customs, the State Administration of Taxation, the State Administration for Industry and Commerce and the State Administration of Work Safety on the Organizing a Special Campaign on Cracking down on Violations of Laws and Regulations during the Mining, Production and Circulation of Rare Earths.” The statement said that eight authoritative bodies have co-launched a nationwide special campaign to fight illegal activities in the rare earth sector from October 10th, 2014 to lasting until March 31th, 2015.

“Despite previous crackdowns however, acts such as illegal mining, illegal production, illegal purchase and sales of rare earths, processing the illegal rare earth minerals, unplanned or exceeded the state-set rare earth quotas, are still very serious in some areas. The leaders of the State Council required to intensify crackdown on violations of laws and regulations in the rare earths sector, to investigate a number of typical cases about violations of laws and regulations, to take resolute and decisive measures to curb the illegal mining, producing and trading while the neglect or dereliction of duty must be held accountable,” the MIIT said in the statement.

According to a “Plan for the Special Campaign on Cracking down on Violations of Laws and Regulations during the Mining, Production and Circulation of Rare Earth” issued by the MIIT, the new round of nationwide special campaign will mainly focus on: Inspecting the execution of mandatory production plans and total mining volume control indicators; Inspecting the output, sales volume and circulation of every rare earth mine enterprise; Inspecting the sources and quantity of minerals of every smelting and separation enterprise and the output and sales volume thereof; Inspecting the sources and quantity of rare earth mines and smelting and separation products of every trading enterprise, the sales volume and downstream customers thereof; Inspecting the sources and quantity of rare earth products of every rare earth exports enterprise; clearing up the enterprises engaged in recycling rare earths from waste products, and inspecting the sources of raw materials and the quantity and sales volume thereof; In accordance with the list of enterprises (which is provided by the MIIT) and the clues of tip-offs against illegal mining or production, investigating and handling a number of typical cases of illegal rare earths; To create an archive for every rare earth enterprise based on the inspection period in order to have a timely grasp of the information during the production and operation, such as buying and selling of rare earth mineral products.

Industry insiders generally estimate that illegal rare earths coming from unknown sources, which account for over half of the rare earths in circulation market at present, and it was a major factor that dragged price down. Therefore, a six-month special campaign to fight illegal rare earths that could help to reverse rare earth price falls.

Chinese top authority has repeatedly stressed to strictly investigating and punishing government official’s corruption involved in the illegal rare earths, which has led to some local government officials being investigated, such as a last week’s case, Kuang Guanghua, the party chief of Anyuan County in Ganzhou, was sentenced to 17 years in prison.

It is noteworthy that at the Dispute Settlement Body (DSB) meeting on September 26th, China has again stated its intent to comply with the WTO’s decisions. The Chinese government currently is negotiating with the U.S., EU and Japan to establish a reasonable period of time for the implementation of the DSB recommendations and rulings.

Chinese authority launches new special campaign to fight illegal rare earths lasting until March 31th, 2015, aims to pave way for the removal of the country’s export restraints on rare earths, tungsten, and molybdenum in the next year.