China, the world's largest supplier of rare earth elements, yesterday imposed a 72 per cent cut on the export of minerals that are critical for hi-tech industries and military hardware.
The Ministry of Commerce said exports would be restricted to 7,976 tonnes, compared with 28,417 tonnes for the same period a year ago.
China, which controls 98 per cent of the supply of rare earths, has for some years been gradually reducing exports.
But as demand has risen in recent years with the increase in products using these minerals, such as mobile phones, hybrid cars, heat-resistant metal alloys, and specialist magnets, alarm bells have been ringing in the United States and Europe over China's supply dominance.
'It's a continuation of a trend we have seen in recent years. China is working to retain more of its natural resources for its own use,' Andrew Driscoll, head of resources research with stockbroker CLSA in Hong Kong, said. 'So for consumers of rare earths outside China such as hi-tech industries, clean and green energy industries, this raises concerns over security of supply for some of these minerals.'
There have been some reports in recent months, notably by the European Union and the US Government Accountability Office (GAO), highlighting increasing Western dependence on China for these minerals.