Quick Take - The good news: China is taking environmental goals more seriously. The bad news: As a result, it plans to shutter one third of its 23 rare earth mines and one half of its 99 rare earth smelters and reduce its rare earth exports by one fifth.
Since China controls 95% of the world’s rare earth supplies, the ensuing shortage could have a major impact on industries that are dependent on these materials, including renewables, electric vehicles, energy storage.
The only bright spot? Canadian firm Orbite Aluminae announced it has successfully extracted the first commercial samples of heavy rare-earth oxides and scandium in Quebec. Production could begin as soon as 2014. - By Jesse Berst
China’s announcement Wednesday that it has started what is said to be the world’s first exchange for rare earths was overshadowed (at least in the U.S. and Europe) by its plans to cut its exports of rare earth metals by 20%. The Chinese government said the reduction is needed to raise environmental standards in its mining sector and preserve its limited rare earth resources, according to a story in BusinessGreen.
While other countries have rare earths, they stopped mining for them in the 1990s when cheaper ores from China hit the market. China maintains about 90-95% of the world’s rare earth production.
It’s not the first time China has lowered rare earth export quotas. They were cut in 2009 and again in the first half of this year.
Jesse Berst is the founder and chief analyst of Smart Grid News.com, the industry’s oldest and largest smart grid site. A frequent keynoter at industry events in the U.S. and abroad, he also serves on advisory committees for Pacific Northwest National Laboratory and the Institute for Electric Efficiency. He often provides strategic consulting to large corporations and venture-backed startups. He is a member of the advisory boards of GridGlo and Calico Energy Services.