China hiked its annual rare earth output quotas on Thursday by 20% year-on-year to their highest levels on record, as it seeks to increase supply for manufacturers.

A statement from the Ministry of Industry and Information Technology said the 2021 rare earth mining output had been set at 168,000 tonnes, up from 140,000 last year.

The 2021 quota for smelting and separation - or processing of rare earths into a form that can be used by manufacturers - is 162,000 tonnes, also up 20% on the year, the statement jointly issued with the Ministry of Natural Resources showed.

China is the world's dominant producer of rare earths, a prized group of 17 minerals used in consumer electronics and military equipment.

It typically announces rare earth quotas twice a year and the full-year allowances have been published unusually late.

Quotas for the first half of 2021 were in February set at 84,000 tonnes for mining and 81,000 tonnes for smelting and separation. The full-year quotas imply the same levels for the second half.

The quotas are awarded to six state-run companies: China Minmetals Rare Earth Co, Chinalco Rare Earth & Metals Co, Guangdong Rising Nonferrous, China Northern Rare Earth Group, China Southern Rare Earth Group and Xiamen Tungsten.

The Minmetals unit last week flagged a potential consolidation of some of the so-called "Big Six" when it said its parent was discussing restructuring with Chinalco and the government of rare earths hub Ganzhou.