The reason Apple makes its iPad in China is not just because of cheap labour, but also because rare earth elements used in the tablet can only be found there, according to reports.

The New York Times reports that China currently controls 95-97 per cent of the world’s supply of the rare earth materials that Apple uses to make the iPad, and China’s decision to cut export quotas has caused prices of the materials to rapidly increase.

Companies can only be exempt from China’s rare earth export quotas by manufacturing within China, which is why Apple chooses to have its iPads made there, says iFixit.

Although it is not clear exactly what rare earths are used in the iPad due to Apple’s secretive nature, Cambridge engineering professor, Dr. Tim Coombs, believes that there may be lanthanum in the iPad’s battery, as well as “a range of rare earths to produce the different colours” in the display. Neodymium alloy might be the material found in the magnets in the iPad and the Smart Cover, and the glass is probably polished with cerium oxide, iFixit reports.

Because the price of rare earths has become so expensive, and China has almost complete monopoly of the materials, California’s Molycorp and Australia’s Lynas Corp plan to start mining rare earths themselves in the near future.

Barack Obama is also concerned about the rare earth situation, and has spoken to the World Trade Organisation arguing against China’s rare earth policy, but specialists believe that by the time any action is carried out to change the policy, more manufacturers will have relocated factories to China.

Apple has been under scrutiny about its Chinese factories recently, after allegations that the company has been ill-treating its employees.