China maintains near monopoly on mining and production of rare earth elements and is controlling their production
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Today, a single country – China – holds a virtual monopoly on the mining and production of rare earth elements. China produces more than 90 percent of the world’s supply and also consumes roughly 60 percent of that supply. Brazil, India, Malaysia and Canada are the other sources of the remaining paltry supply of rare earths.
China recently imposed significant export restrictions on its rare earth production. In 2010, it announced it would cut exports of rare earth minerals by 40 percent by 2012. Just last week, Chinese officials released a white paper defending the country’s export control restrictions on rare earths. Earlier this year, the U.S. joined with Japan and the European Union to file complaints with the World Trade Organization (WTO) over China’s export policies on rare earths. Experts believe China may eventually consume 100 percent of the rare earth minerals that it produces, jeopardizing U.S. manufacturers’ access to these materials and, at the very least, significantly driving up costs for companies that use these minerals. These increased costs would impose significant and detrimental costs on the many millions of consumers who use these products and could have a profound negative impact on U.S. national security.