GTSI: New Rare-Earth Ore Production Quotas Could Lead To Shortages

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China's recent issuance of new mandatory production quotas for rare-earth ore indicates that the world's top producer of rare elements can no longer keep pace with global demand for the critical materials, according to Green Technology Solutions Inc. (GTSI).

Rare-earth materials are critical components in the manufacture of high-tech green energy technology, including wind turbine generators, photovoltaic solar panels and electric-car batteries.

The Xinhua News Agency reported Monday that China's Ministry of Industry and Information Technology (MIIT) announced new mandatory production quotas for several rare metals conceived as part of the government's plans to implement new protective mining policies. The new annual production quota for rare-earth ore is set at 184,200 tons: 93,800 tons of rare-earth oxide and 90,400 tons of rare-earth oxide smelting.

MIIT also reiterated that China will not grant any new licenses for prospecting and mining rare-earth ores before June 30, 2012.

Currently, China accounts for more than 95% of global rare-earth ore production. Environmental concerns and shifting economic strategy, however, led the country to cut its rare-element production by 35% in the first half of this year, according to GTSI.

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