China announced it will further restrict exports of rare earth metals, by cutting its export quotas by 72 percent for the second half of this year. Shipments of rare earth metals will be capped at 7,976 metric tons, down from 28,417 tons for the same period in 2009. The country claims the policy is out of concern for the environment and to minimize pollution, but some claim it's a geopolitical decision intended to force high-tech manufacturers to produce their goods in China.
The country controls 97 percent of the production of rare earth elements, which are required for many high-tech products like cell phones, lasers, TVs and many gadgets, but also for lots of military applications as well as a variety of clean energy technologies, including solar panels, electric car batteries, wind turbines and energy efficient light bulbs.
“China’s policy to restrict its rare earths mining and exports is out of concern for the environment and to minimize pollution,” Liu Aisheng, director of the Chinese Society of Rare Earths, said in an interview with Bloomberg News in June. “It also encourages the domestic industry to effectively use its own resources and discourages exports of raw materials, such as ore and mixed ore, without much processing.”
Rare earths are a group of 17 chemically similar metallic elements, including lanthanum, cerium, neodymium and europium. The U.S. was self-sufficient in the materials until the mid- 1980s, when lower labor and regulatory costs helped China’s climb to dominance, the U.S. Geological Survey said in a report.