China to cut export of rare-earth materials in 2011

IMS Research's latest report on the world linear and torque motor market reveals that the biggest challenge facing the industry to date is sustainable supply of rare-earth magnets. Further worrying linear and torque motor makers are supposed plans by the Chinese government to cut exports of rare-earth material by 35 percent in the first half of 2011.

China produces 97 percent of the world's rare-earth material, thus controlling the global rare-earth material market. According to China Custom Statistics, in 2010 China exported 39,813 tons of rare earth material, much less than its nine-year average of 60,000 tons a year (as estimated by www.chinamining.org).

The market for linear and torque motors had recovered to pre-downturn levels by the end of 2010 and is set for further growth in 2011 and 2012. However, industry players ask: How are direct-drive motor manufacturers going to ensure continuity of supply of rare-earth magnetic components? What is the motivation behind the Chinese government's of rare-earth supply? Is the government simply driving up the price of a commodity under its control, or is it looking to increase local value-added production and technology levels?

The increasing number of direct-motor manufacturers opening production facilities in China or entering into partnerships with Chinese companies to produce rare-earth magnetic components suggests the latter. With the price of rare-earth material increasing with restricted exports, China is making a healthy profit from companies that choose to import rare-earth raw materials—certainly a win-win situation.

- Phil Ling
??EE Times