China Shrinks Rare Earths Export Quota, Tuesday, 28 Dec 2010 | China said Tuesday it is reducing the amount of rare earths it will export next year by more than 10 percent — likely to be an unpopular move worldwide since the minerals are vital to the manufacture of high-tech products.
China accounts for 97 percent of the global production of rare earths, which are essential to devices as varied as cell phones, computer drives and hybrid cars. Countries were alarmed when Beijing blocked shipments of the minerals to Japan earlier this year amid a dispute over disputed islands.
Concerns over China's grip on rare earths has led countries on a hunt for alternative sources. A number of companies in North America — notably Molycorp in the U.S. and Thompson Creek Metals in Canada — are hurrying to open or reopen rare earth mines. Two Australian companies are also preparing to mine rare earths.
No big surprise there, as you've got the chinese saying their going to set prices and in fact that's what they've doing for years and they've been the only player in that market. But the pricing power they have will indeed decline relatively quickly, and thus the strong moves with raising thier rates, cutting precious metals exports, etc.
