China Stockpiling Rare Earth Resources
China has been building up reserves of precious metals that could give the communist country more control over those resources that are needed for many of today’s high-tech products, according to a report by The Wall Street Journal.
Storage facilities have been built in Inner Mongolia with capabilities of holding more than the 40,000 tons of metals that China exported last year, the news source said Monday.
The Journal added, however, that details of the strategic reserves have yet to be made public.
China holds about 95 percent of the worldwide trade of 17 minerals that make up the rare earth metals market.
Those minerals are utilized for their chemical and electromagnetic properties, and are used in the production of mobile phones, batteries, wind turbines, televisions and many other high-tech gadgets.
In a US Geological Survey report released in November, it was estimated that 36 percent of the world’s reserves of the metals are in China. With prices of rare earth metals on the rise, jumping up by 130 percent just last year, mining outfits in Australia and other countries are stepping up their efforts to extract more minerals.
But a new mine could take a decade or longer to develop, according to the WSJ report. Because of this, the processing of rare earth metals will remain concentrated in China for years to come.
Analysts fear prices of metals could be driven up even further as China brings more rare earth mines under state control. Just last month it brought 11 mines under state control, as Beijing consolidated the industry.
Also, China tightened its control on metals in December by slashing quotas for exports by around 35 percent for the first half of 2011, as well as increasing export taxes.
In May, an association will be formed to reorganize China’s top 90 companies dealing with rare earth extraction and processing, according to a report in the Huaxia Times last month.