China plans to increase mine output in world’s largest rare earth deposit by 50%

China intends to boost the mine production at Bayan Obo, its largest rare earth deposit in Inner Mongolia, by 50%. The expansion will increase the mine's annual output from 10 million to 15 million tonnes, primarily for iron ore but with rare earths as a by-product. Bayan Obo is a polymetallic deposit containing iron, rare earths, fluorite, niobium, scandium, and thorium.

The project, operated by Baogang Group, aims to raise iron ore output while leaving rare earth production unchanged due to production quotas. Li Yang, a geologist from Peking University, stated that mining for iron ore is the main objective, and fluorite is extracted along the way. Bayan Obo's iron ore resources amount to about 600 million tonnes with an average total iron grade of 35%, which is lower than typical Australian iron ore deposits.

Baogang Group plans to upgrade their existing open-pit operation, raising western pit capacity from 10 million to 13.5 million tonnes and adding a new eastern pit for an additional 1.5 million tonnes, bringing total annual capacity to 15 million tonnes. The company will also enhance mining, stripping, and transport systems and expand waste-rock storage areas, installing intelligent mining equipment like 5G-based vehicle dispatch and slope monitoring systems.

Despite the project being in the feasibility study stage, ongoing geological resources, mining costs, technical challenges, and China's quota-based management system remain significant hurdles to increasing rare earth production.