Emphasis mine:

China’s commerce ministry announced on Tuesday in Beijing a steep reduction in export quotas for rare earth metals in the first months of next year, a move that threatens to cause further difficulties for manufacturers already struggling with short supplies and soaring prices.

The reduction in quotas for the early months of 2011 — a 35 percent drop in tonnage from the first half of this year — is the latest in a series of measures by Beijing that has gradually curtailed much of the world’s supply of rare earths.

China mines more than 95 percent of the global supply of the metals, which are essential for smartphones, electric cars, many computer components and a range of military hardware. In addition, the country mines 99 percent of the least common rare earths, the so-called heavy rare earths that are used in trace amounts but are crucial to many clean energy applications and electronics.

New York Times: China to Tighten Limits on Rare Earth Exports in Early 2011

The good news, if there is any, is that there are mines for these minerals in other countries that could go back into production if China seriously curbs its exports: “Japanese companies account for half the world’s consumption outside China and have some stockpiles, but have kept secret the size of these stockpiles.”

(Via Bill Whitcomb)