Major Chinese supplier halts rare earths production in attempt to boost prices

With prices sliding and uncertainty rising, China's biggest producer of rare earth minerals has suddenly decided to suspend all operations, in a move that could strain already tense relations with the West. Baotou Steel, a miner, refiner and vendor located in Inner Mongolia, announced the decision in a statement today, explaining that it's simply looking to "balance supply and demand" in response to a prolonged price slump within China. Since June, in fact, prices of neodymium oxide and europium oxide have declined by 34 and 35 percent, respectively, with many analysts attributing the drop to mounting economic uncertainty in the US and Europe. Earlier this year, the Chinese government announced plans to merge or close some 35 rare earths producers within the mineral-rich northern region of Inner Mongolia, effectively crowning Baotou Steel as the industry's epicenter. Now, of course, that's all changed, though the shutdown will only last for one month. It's also worth noting that China still exerts rather considerable influence upon the market, accounting for roughly 97 percent of all production of rare earths -- a group of 17 minerals used to manufacture gadgets like cellphones, flat-screen TVs and EV batteries, among others. And while new deposits and market projections may point to a transforming landscape, it's unlikely that Chinese influence will wane anytime soon -- much to the chagrin of Western free trade advocates.