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Trade - Editor, 20 may 2011

Rare Earth Mineral Supply Dominated by China



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Securing its position as the largest supplier of rare earth minerals in the world, China has raised taxes on these products which are essential to high-tech industries. Authorities have also put a ban on new projects which use separation techniques to extract these sought-after metals from crude ores, and China's State Council made it known that increasing production capacity on current projects will be prohibited. These new measures put China in a position to control the supply of the seventeen rare earth minerals used in the manufacture of electronics for innumerable items, from iPods to missiles. It is estimated that China produces more than 95% of the world’s rare earth mineral requirements.

In a statement released to the public, China's State Council noted that the new policies will promote the development of the country's rare earth sector. It was also noted that, through a series of mergers and acquisitions, the government aims to reduce the number of enterprises engaged in rare earth mining and the separation process to extract the mineral from the ore. Beijing has already taken action by closing illegal mining operations, restricting export quotas and setting more stringent environmental standards.

Measures to control rare earth mineral distribution have already resulted in an average price increase of around 130% in 2010, and producers of high-tech items are concerned about the impact the new measures will have on their industries. Australia and the United States have started taking countermeasures by reopening mines that had been closed in favor of cheaper supplies from China, as well as starting to develop new mines in mineral-rich regions. India and South Africa are also rare earth mineral producers, and Japan has reportedly started sourcing these products from India.

The International Union of Pure and Applied Chemistry ( IUPAC) identify seventeen chemical elements in the periodic table as rare earth elements/metals. Although there are ample supplies of these rare earth elements in the Earth’s crust, they are widely dispersed and not found in a concentrated area, requiring much effort to extract them. They are, however, often found together. The rare earth elements are: scandium, yttrium, lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, and lutetium.

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