China’s large producers of rare earth elements are reportedly reducing their output or closing down.

Japan’s newspaper the Nihon Keizai Shimbun said that there used to be some 300 rare earth element producers in China. The Japanese daily reported that 25 percent of rare earth element refineries and processors have closed down and the rest are operating at 30 to 40 percent of their previous levels.

The phenomenon is attributable to a drop in demand, which was partly caused by Japan’s diversification of channels to import rare earth elements. Japan was China’s largest buyer of rare earth elements. Other reasons include the global economic slump and the Chinese government’s adoption of stronger measures to preserve those resources.