China is reducing the number of permits for rare earth mining by 40% prompting concerns that it is attempting to boost its high tech manufacturing sector by driving up rare earth prices overseas.
More than 90% of rare earth elements are mined in China, which also consumes that largest amount of the elements in its factories. Rare earth elements are needed to manufacture high-tech equipment from smartphones to flat screen TVs, Wireless Week noted.
Prices for the rare earth elements spiked last year after China restricted exports, prompting concern from other nations that China was attempting to attract overseas companies to shift the manufacturing to China to avoid the restrictions.
However, slowing economies in Europe and North America have reduced the need for Chinese exports, idling Chinese factories and reducing its consumption of the elements.
Western nations have filed various complaints over China’s export restrictions with the World Trade Organization, but China insists the export controls are needed to save the environment.
China possesses about 30% of the world’s rare earth element reserves, but cheap Chinese production led non-Chinese producers to shutter operations in the 1990’s.
The export controls and rising prices have spurred new rare earth mining efforts in the U.S. and Australia.