The future of India's, and the world's, green technologies depends on them. So do mobile phones, MP3 players and even missiles.
Rare earths are a select group of 17 elements that are crucial to many of the world's most advanced technologies. They also happen to be found widely in China, which is estimated to account for more than 95 per cent of their global supply.
The Chinese government is now considering tightening its control over the production and export of the valuable minerals, by restricting private companies' access to their mines and their license to trade.
China's State Council, or Cabinet, is examining a proposal that calls for limiting the production of rare earths to a select group of State-run enterprises, a move that would give the government almost complete control over both the destinations of export and a much greater say in regulating supply and prices.
“Once approved, the Ministry of Land and Resources (MLR) will issue licences and start allocating the resources to those companies,” an unnamed official told the official China Daily newspaper, which did not name the companies that have been short-listed. “Private enterprises can only collaborate with the selected firms through shareholding,” said the official.
The rising importance of the 17 rare earth elements, which are crucial to a range of green technologies from hybrid cars and wind turbines to solar cells, has seen a proliferation of illegal mines in China. The mining of rare earths has also resulted in severe environmental damage in China's south, prompting the government to consider tighter regulations. Many countries have abandoned projects to mine the elements.
The illegal mining and unregulated trade has, however, also resulted in keeping in check the prices of the elements for foreign companies.
The prices of rare earths have only risen by 20 per cent over the last three decades in spite of fast-growing demand, the China Daily reported.
The government is now hoping that stricter regulations will make the elements more valuable. “The mineral is very much undervalued because of over-exploitation and improper management,” said Zhang Anwen, deputy secretary-general of the Chinese Society of Rare Earths.
The move to more tightly regulate the mining of rare earths has sparked concerns abroad. Several countries, including the United States, are heavily dependent on China for rare earth elements.
Earlier moves to cap production and expand government control over trade brought China criticism from the World Trade Organisation (WTO), which said restrictions on the export of some raw materials was illegal.
In March, China announced a cap in the production of rare earths for the rest of the year, limiting production to a 8 per cent rise from the previous year. China has also stopped issuing licences for domestic companies to mine rare earths until June of next year.
