Shanghai news: China's rare earth demand may surge by more than 50% in the next five years, putting pressure on authorities to relax strict production quotas. Strict production quota restrictions have led to rampant illegal mining and smuggling activities.

Chen Zhanheng, Deputy Secretary General of the China Rare Earth Industry Association, pointed out at a conference in Shanghai that domestic demand is expected to increase by nearly 9% this year to 97700 tons, and by the end of 2020, demand will approach 150000 tons, a 50% increase from 90000 tons in 2014.

It is expected that at least 30000 tons of rare earths will be exported through official channels this year, and the production capacity of 105000 tons is unlikely to meet the total demand, which means that illegal producers will still be incentivized to produce.

Shutting down all illegal mining is not an easy task. Their production costs are low, mines are scattered, and even some local departments protect illegal mines, "he said.

Industry estimates show that China's rare earth production not only accounts for about 90% of global supply, but also consumes about 80%, and demand continues to grow.