Creating a Shortage

The US established rare earth market control in the mid 1960's and until the mid 1980's remained the dominant producer. The US reigned in it's rare earth mining, but as environmental standards became more of a concern and China's production capabilities became a specialization beneficial for both nations and the world as a whole, US production slowed. By the late 1990's US rare earth production had all but come to a halt and China had relative control of the market that no one else ever had before. Now it seems China will be easing production capability in the future based on environmental concerns and wisely enough to economically substantiate their position in the world as the controller of rare earth supply.



Recently China has moderately increased the quota of production, but capped the production and smelting of molybdenum, rare earth oxides, tungsten, antimony and tin in most all of Chinese provinces. The increases in resource quotas range from 5-15%. Additionally China will not give permission to mine new projects of the noted resources anytime before June 30, 2012.

Supplies going forward remain tight unless China's reserves come to market, even then key heavy rare earths and certain rare earth oxides would remain in short supply.