Rare earths are an essential element for various high-tech production processes, and production is practically monopolized by China, which accounts for about 90% of world sales. Despite the name, rare earths are neither earths nor rare (as Voltaire said of the Holy Roman Empire, which was neither Holy, Roman or Empire). They are a group of 17 metals, found in various parts of the world. But the concentrations are different and the extraction techniques expensive, so that China has found itself in the dangerous (for customers) position of quasi-monopolist. And he hasn't hesitated to threaten to suspend exports for political ends, as he did a few months ago with Japan. China has recently introduced export quotas, under the guise of ecological reasons. Yesterday the quotas, after the WTO had declared these restrictions illegal, were set for the second part of the year at levels slightly higher than those expected by the market. Meanwhile, given the existence of a 25% export duty, domestic customers enjoy a lower cost than international ones.
http://www.chinapost.com.tw/business/asia-china/2011/07/15/309908/China-issues.htm
http://www.marketwatch.com/story/dacha-comments-on-china-rare-earth-quotas-for-second-half-of-2011-2011-07-14?reflink=MW_news_stmp
