China has started stockpiling rare earth metals for the first time in a move that is likely to have a knock-on effect on the production of renewable energy technologies.

The state-run China Securities Journal reported last week that the government was awarding state funds for the strategic purchase of certain oxides, said to include four of the most critical elements in terbium, dysprosium, europium, and yttrium.

China accounts for around 90 per cent of the world’s supply of rare earths, a group of 17 metals vital for manufacturing a wide range of high tech products, including wind turbines, solar panels, and electric car batteries.

However, the Chinese government warned last month that the decline in its reserves is “accelerating” because of excessive and illegal mining and has vowed to take action to protect its resources.

Last month, the Ministry of Industry and Information Technology (MIIT) clamped down further on the production of rare earths, enforcing a strict quota system and reportedly shutting down a number of illegal operations.

China says the measures are to protect the environment and conserve supplies, but since 2010 it has pursued a policy of restricting exports.

The policy has prompted the US, Europe, and Japan to complain to the World Trade Organisation (WTO) that China is deliberately trying to inflate prices for rare earth’s, which despite an explosion in consumer electronics devices, have fallen over the past year.