China’s revamping of its controversial export quota system for rare earths is unlikely to stem the nearly six-month slide in prices of the crucial elements but could cause shortages of critical “heavy” rare earths, say analysts and industry executives.
The new quota system, announced this week by the Ministry of Commerce, keeps overall quotas for 2012 in line with the previous two years but segments them between companies based on their environmental compliance as well as further distinguishing between “light” and “heavy” rare earths.
China produces almost all of the world’s rare earths – 17 elements crucial for everything from wind turbines to fluorescent lighting to iPhones and military radar systems – and Beijing’s control over these elements has been cited as a security concern for countries such as Japan and the US, which rely on imports from China.