China is again flexing its rare earth muscles, and causing consternation with new ‘environmental standards’ cum restrictions on the essential elements.

Rare earths – the actually not-that-rare scandium, yttrium, and the lanthanides – are vital for many modern pieces of electronic equipment and green technology, in part due to their use in batteries. China has control of the lion’s share of world production and last year hinted that it could raise taxes and reduce exports.

Now it has emerged that new standards governing the production of these elements are in the works. State media reports that these are an attempt to raise environmental standards and fight illegal mining and “are expected to pose operational challenges and raise environmental costs”.

China Daily notes that Chao Ning, section chief of foreign trade with the Ministry of Commerce, told a Beijing conference that the country cannot continue to shoulder the burden of supplying the world’s demand for rare earths.

These moves have sparked consternation among high-tech nations, whose governments have already been expressing concern over China’s monopoly on rare-earth production (see for example Japan’s and Germany’s recent statements).

If China’s move does ensure higher prices, it may only accelerate plans to make sure the world’s supply doesn’t rest in just one country. It was in part China’s relative lack of costly environmental controls that gave it a monopoly on the elements in the first place. Rising prices have led to America’s sizeable reserves at Mountain Pass being deemed commercially viable again by owners, Molycorp. Expect to see more interest in new (or refurbished) sources of rare earths this year, at least while prices remain high and China remains a difficult supplier.