China currently dominates the world’s crucial rare earth minerals market, which are essential components for many clean energy technologies and high-tech devices. Last year, China cut rare earth exports by 40%, causing panic among clean energy and technology companies and manufacturers all over the world.
We have been monitoring all news coming from China regarding its rare earth export policies. Considering they control nearly 97% of the market, China’s policy decisions have ramifications all around the world.
Based on new announcements, China will now place annual quotas on rare earth mining and exports. This reflects a Chinese effort to rein in environmental costs and damages associated with mining, increase the dominance of some of its biggest state-owned players, and secure future supplies for itself. Rare earths are crucial for clean energy technologies, which is a top investment priority for China.
China will cut export quotas by 35% for the beginning of 2011, but has not announced final quota numbers for the year. Export tensions have run high between China and its trading partners in the United States, European Union and Japan. Many are “alarmed” at the prospect of a rare earth supply shortage, and have been scrambling to begin production on new rare earth mines to diversify resources. Read more…