Rare earths are used in wind energy and electric vehicles

China, the world’s top rare earth producer, plans to establish a global authoritative pricing index for rare earth metals in an effort to enhance its pricing power over the resources, a leading domestic producer said on Thursday.

The country’s newly launched rare earth trading exchange will team up with futures and financial information institutions to compose the pricing index, Zhang Zhong, general manager of the Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-Tech Co. (REHT), China’s largest rare earth producer, said at a major annual industry conference.

However, Zhang did not provide a timetable or elaborate on the creation of the index.

The REHT launched the trading platform in the city of Baotou on Wednesday along with nine other domestic rare earth firms and institutions with a total investment of 100 million yuan (15.87 million U.S. dollars). The 10 companies and institutions produce about 88 percent of the country’s annual rare earth output.

Zhang said it will take some time for the exchange to start trading because of some unfinished preparatory work.

China now supplies more than 90 percent of the world’s demand for rare earth metals. Zhang said the proportion will experience a substantial decrease over the next few years.