China Plan for Rare Earth Reserve Worries Tech Sector
By wchung | 18 Apr, 2026

China will create a reserve for rare earths next year to prevent waste of the exotic metals used in computers and clean-energy products, an official said in comments reported Wednesday by state media.

China produces nearly all the rare earths used in lightweight batteries for hybrid cars, mobile phones and other high-tech products. News reports in August that Beijing plans to reduce this year’s exports by 8 percent from 2008 levels sparked concern about the possible impact on industry abroad.

The reserve will be part of efforts to strengthen protection of China’s rare earths resources, said Chen Yanhai, director general of the Ministry of Industry and Information Technology’s department of raw materials. The comments at a conference were reported by the Communist Party newspaper People’s Daily and other outlets.

The reports gave no details of how the reserve would work and a ministry spokesman, Wang Lijian, said he had no information on Chen’s comments.

The United States and some other countries have deposits of rare earths and the U.S. met most of its own needs until the 1990s. But other countries cut production as low-cost Chinese ores flooded global markets.

China accounts for 95 percent of global production and about 60 percent of consumption of rare earths, which include dysprosium, terbium, thulium, lutetium and yttrium, according to the U.S. Geological Survey.

Chen’s deputy, Wang Caifeng, said in September that the proposed curbs are needed to reduce environmental damage from mining.

Earlier Chinese news reports that foreign miners took advantage of low prices this year to build up rare earths stockpiles prompted complaints on Internet sites that foreigners were getting China’s resources too cheaply.

According to the reports Wednesday, Chen also said China should promote development of large-scale enterprises in its rare earths industry.

Chinese investors reacted positively to the news of a possible reserve, which might require government purchases of minerals. Shares in Inner Mongolia Baotou Steel Rare Earth Co. rose 6.4 percent on the Shanghai exchange.

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Associated Press researcher Bonnie Cao contributed to this report.

12/23/2009 4:56 AM BEIJING (AP)