China to reduce 'rare earth' quotas

China’s government announced Tuesday it was reducing its export quotas on rare-earth metals, which could limit supplies of key components used in cell phones and other products.

The decision is sure to increase angst in Congress about a shortage of materials used to build technologies such as wind turbines and electric vehicles. China develops about 97 percent of the world’s supply of rare-earth materials.

China’s ministry of commerce said it would allot 14,446 metric tons of rare-earth exports to be split among 31 companies, according to a report in Bloomberg.

The allotment is nearly 2,000 metric tons fewer than the first allotment of 16,304 metric tons released at the beginning of last year. China generally issues two rounds of quotas each year.

Earlier this year, press reports indicated that China would restrict shipments of rare-earth minerals to the United States, as it has done in Japan. The reports sparked concern among U.S. lawmakers that there is no domestic supply of the minerals.

The United States's best hope for domestic production lies in the efforts of a company called Molycorp, which is working to restart mining at a rare-earth mine in California that was shuttered in 2002. Molycorp hopes to begin mining rare earths at the Mountain Pass mine next year.

Shares of Molycorp rose nearly 11 percent after China announced its decision, according to a report in Reuters.