Source: Bloomberg News                            Date: 31 August, 2011

The price or rare earth minerals tripled since May, putting the squeeze on companies who need them for high-tech hardware. China's decision to tighten its trade of rare-earth minerals may open up competition for competitor nations, such as Mongolia.

Rare-earths are becoming increasingly more vital to manufactured goods. Hitachi Metals Ltd, a manufacturer of magnetic and electronic materials, a Tokyo-based analyst at Credit Suisse AG Shinya Yamada said. China produces more than 90 percent of the world's rare earths in an assortment of high-tech companies and heavy machinery manufacturers. However, China curbed its exports since 2009, explaining that it needed to conserve resources. This move effectively raised the prices of these materials.

China changed its strategy from limiting export quotas to tightening regulations for digging and refining.” said Fujinori Sato, deputy manager at the electro materials section of Sojitz Corp. “Prices may go up further later this year.”

Currently, the Chinese government is reviewing a notice from the WTO informing it that the tax and quotas on the export of raw materials violates international trade laws. Meanwhile, firms are looking for ways to reduce the number of rare-earths needed for their products. Chinese firms, on the other hand, are limiting and even halting production to meet government requirements.