China supplies more than 95% of the rare earth minerals needed in the global market. Last year it cut its export quotas for rare earth minerals citing environmental concerns and a crackdown on illegal mining activities. This has caused a shortage of the vital minerals in the world markets.
Nations such as Japan, the United States and the members of the European Union have expresses concern over the state of supplies of the rare earth minerals. The World Trade Organization recently ruled China’s export quotas on certain raw materials violate international trade laws.
This is easily proved as the quotas from China have driven up the prices of rare earth minerals substantially in the past one year. According to the Ministry of Commerce website, rare earth export quotas for 2011 will be 30,184 tons, slightly less than the 30,285 tons of rare earths China exported in 2010.
Rare earths are a set of 17 chemical elements that are scarce but necessary for a number of technologies, including batteries for electric cars, wind mills, high-strength alloys for aerospace applications, cracking catalysts for oil refineries, elements in missiles, a variety of lasers, portable X-ray machines and PET scans.
There were hopes that the World Trade Organization ruling would make China increase the exports to help meet the growing global demand for rare earth minerals, but that does not seem to have happened.