Is it really the falling prices of rare earths in the global market that might push China to reconsider its export policies, or the threat that the U.S. and Australia might overtake it as the world's rare earths hub?

Wang Caifeng, previously connected with China's Ministry of Industry and Information Technology handling the country's rare earths sector, forecast China will move this year to ease its self-imposed export control of its rare earths and reconsider increasing overseas sales rations.

"High prices last year had deterred purchases and led to inventories depletion...Export quotas may be met this year as overseas demand recovers," Wang told Bloomberg News.

Ironically, however, Wang's projections came at a time when two of the world's non-Chinese rare earths producers, American Molycorp Inc. and Australian Lynas Corp., have been aggressively advancing their respective rare earths mines this year.

Molycorp Inc., in early January this year, said 58 per cent of the expected 19,050 metric tonnes under its Phase I production has been allocated toward customer agreements.

As for Lynas Corp., the combined output from its two projects - Mount Weld and the Malaysian LAMP plant - is expected to give 11,000 metric tonnes of rare earth metals annually.

It does not take much of a Math wizard to realize that the rare earths the two non-Chinese miners can give to the world already runs comparable to China at 30,050 metric tonnes combined.

Just recently, Molycorp, Inc. announced the sequential start-up of its $895-million worth new Project Phoenix rare earth manufacturing facility at its flagship Mountain Pass, California operation, ahead of an April 1 target schedule.

On the other hand, Lynas Corp. had been granted a temporary operating license (TOL) needed to advance its rare earths processing plant in Gebeng, Kuantan, Malaysia the remaining puzzle that will allow the Australian miner to fully operate its Mount Weld rare earths mine. Albeit the ongoing protests that Lynas Corp. faces from the locals on health and environmental concerns, the Malaysian plant is already almost fully constructed.

China is the world's stronghold of rare earths, feeding 95 per cent of the world's supply requirements. But the Asian country, parallel to concerns as that with the Malaysians versus Lynas Corp. in wanting to protect the environment as well as protect mining resources, in 2009 suddenly started controlling output and eventual exports of the precious metals.

In 2011, Beijing imposed an export quota of 30,184 metric tonnes, marginally reduced from 30,258 metric tonnes in 2010. For 2012, based on Bloomberg News calculations, the country's full-year quota may hit about 31,130 metric tonnes. Way back in 2009, export quotas were set at 50,145 metric tonnes.

Prices of rare earths have tumbled since the third quarter of 2011. Global consumers such as electric cars and wind turbines manufacturers curbed usage amid the absence of a constant, reliable and dependable rare earths supplier. Moreover, consumers were forced to research and adopt technologies that will not rely on rare earths for their products.

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