China limits rare earth exports

China (which produces about 97 percent of the global supply of rare earth metals) has announced that it plans to restrict exports of rare earths by 10% for 2011 and it is also increasing export taxes for some rare earth elements to 25 percent in 2011.

These moves raise fears that shortages of rare earths will drive prices higher and make many hi-tech consumer goods more expensive.

Among the seventeen rare earths, Cerium is an abrasive used in the manufacture of flat screen televisions whilst neodymium oxide is used in manufacturing computer hard drives, smartphones, Wind turbines and hybrid cars are among the biggest users of rare earth minerals. Neodymium oxide costs $US88.50 a kilogram - more than four times its price in 2009.

Export quotas will intensify the search for alternative supplies of rare earth resources not least in Australia, Brazil, Canada and South Africa. In California the once-closed Mountain Pass mine owned by Molycorp Inc is scheduled to reopen in 2011 at huge cost. In Australia Lynas Corp is building a $542 million are earths mine in Western Australia

Vietnam also stands to benefit from recent developments. In October 2010 it signed an agreement with Japan to supply rare earths from it’s own resources.

And the demand for waste glass - something rich in rare earth elements - will also rise worldwide if Chinese exports remain under tight control.

Further reading:

Independent: The ecological risks of clean energy’s ‘dirty little secret’

Guardian: China’s rare earths export cut raises trade concerns