China cuts production of rare earths, halts issuing licenses

China's Ministry of Land and Resources issued a document by which it stops issuing exploring licences for rare earth metals, tungsten and antimony until 30 June 2010, reducing the production of the first ones in 6% as well. The plan aims to boost prices of these metals as many miners recently stopped operations when prices dropped sharply as a result of the global financial crisis.

Half of the world's deposits of rare earths, tungsten and antimony are located in China, which produces 80% of total global output. The country always knew the importance of the rare metal as late-former leader Deng Xiaoping once said: "The Middle East has oil, China has rare earths". The decision had immediate effect in the markets: shares of rare earth miners such as Tianjin Benefo, Hunan Nonferrous and Canada's Avalon jumped up to 3% in the same day it was announced.