China will impose a tax on rare earth minerals starting April 1, according to a statement issued jointly by the Ministry of Finance and the State Administration of Taxation to rare earth producers.
Zhang Zhong, general manager of Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co., the country's leading rare earth producer, confirmed Thursday that the company had received the statement.
According to the statement, the tax rate of mined light rare earths is 60 yuan (9.1 U.S. dollars) per tonne, while that of medium and heavy rare earths is set at 30 yuan per tonne.
Zhang said the tax would increase the company's production costs by about 720 million yuan this year.
Zhang also said that measures, such as the resource tax, taken to protect the rare earth resources would benefit the company in the long run.
The company headquartered in north China's Inner Mongolia Autonomous Region is currently the world's biggest producer of rare earth magnets widely used for making electronic products like computer hard drives and cordless tools.
Yang Wanxi, director of a rare earth expert panel of the Baotou Municipal Committee of Sciences, said taxes of rare earth minerals were currently levied under the category of ordinary non-ferrous metals, whose tax rates were between 0.5 and 3 yuan per tonne.
Baotou Steel Rare-Earth does not pay tax to mine the minerals as its parent company Baotou Steel Group pays it along with other minerals such as iron ore, Yang said.
He said prices of rare earths have been soaring since February, sometimes by 10,000 yuan per tonne a day. The price of neodymium, a rare earth mineral used for making rare-earth magnets, has increased to 600,000 yuan per tonne this week from 300,000 yuan per tonne by the end of last year.
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