As I’ve written before, green-tech fans have a bit of a problem: the materials used to make things like super-strong magnets, high-efficiency solar panels, and the like are in high demand, but limited supply. And the supply of these “rare earth elements,” as they are called, is mostly in the hands of the Chinese, who are keen to use their near-monopoly control over the rare earth’s to lead companies to build manufacturing facilities in China. This has been foreseen for some time now, but green-energy boosters have tended to downplay the importance of the rare earths.

Alas, an article in the International Business Times shows that China continues to hit the brakes on the exports of rare earths:

Global consumers and manufacturers dependent on rare earth metals for their products better brace themselves for a further supply crunch as China, the world’s foremost supplier of the precious minerals, will cut down overall production output to just about 70 per cent by 2015.

In its latest report, “Rare Earths & Yttrium: Market outlook to 2015, 14th edition 2011,” international metals and minerals research firm Roskill said much of the total output would go to Chinese manufacturers to address the demands of domestic industry, leaving only a small amount for export.

My conclusion from March of 2010 stands up pretty well: “Many U.S. policymakers on both sides of the aisle have drunk the ‘green energy Kool-Aid,’ and support the rapid expansion of wind and solar power as a means to ‘create jobs’ and to stimulate what they claim is the next great opportunity for wealth creation in the United States. But the reality is, the more we invest in wind and solar power, the more we create jobs in China and India, which will increasingly sell us the devices that, in many cases, we designed, but cannot manufacture competitively due to high labor rates and a complete lack of investment in securing the rare earth elements needed in manufacturing.”

Kenneth P. Green is a resident scholar at AEI