The price of rare earth metals, used in items raging from computer hard drives and wind turbines to plasma televisions and smartphones, has more than doubled to record levels in the past two weeks, after a clampdown on illegal mining by China, the world's dominant producer of such elements.

The increases have fuelled concern that the world is hurtling towards a chronic shortage of rare earth metals, which could put everyday products out of the reach of large parts of the global population.

Europium oxide, an element with phosphorescent properties used in energy-saving light bulbs, plasma TVs and smartphones, has nearly tripled from about $1,260 a kilogram to a record $3,400.

Dysprosium oxide, a key additive used in the neodymium-iron-boron magnets found in computer hard drives and wind turbines, doubled from about $720 a kg to a record $1,470 over the same period. That follows a near tenfold rise in the price of dysprosium oxide in the year to June.

Mike O'Driscoll, editor of Industrial Minerals, says: "Most experts in the industry think we are going to reach a crisis point in 2014 and 2015. There are 200 to 300 developers trying to bring new projects onstream to increase supply, but many of these are in the early stages and it may be another five or 10 years before they are operating."

Prices of the 17 so-called rare earth metals have risen in recent years because China, which produces 97% of global output, has significantly reduced exports and built stockpiles. Although China only has about a third of global rare earth deposits, it dominates the market, having forced most competitors out of business by undercutting them.

At the same time, demand for rare earth metals has rocketed as the digital revolution has produced a huge array of popular hi-tech products such as iPods and smartphones, while fast-growing emerging markets have created millions of newly wealthy consumers to buy them.

The latest leap in prices came after the Chinese government announced the closure of 35 small mines in Inner Mongolia as part of a clampdown on illegal mining that is expected to be followed by further closures elsewhere in the country. A few days later, it emerged that China was planning to stockpile heavy rare earth metals such as europium oxide and dysprosium.

Furthermore, concern is mounting that China will shortly announce plans to extend its tough export curbs on rare earths. The country slashed its export quotas by 72% in the second half of 2010 and reduced them by a further 35% in the first half of 2011 as it seeks to preserve supplies of key industrial ingredients.

Global demand for rare earth metals is forecast to rise by 48% to 185,000 tonnes by 2015. Although a host of companies outside China are rushing to produce rare earth metals, they are not expected to keep up with rising demand and experts are predicting a shortfall of up to 50,000 tonnes by 2015 – and a corresponding jump in prices. Supplies should then begin to increase, and prices fall, as more new mines come onstream, says O'Driscoll.

Nigel Tunna, managing director at Metal Pages, a website which tracks the prices of rare earth metals, says the big problem is that nobody seems to know what the effect of the looming shortage will be and therefore how to prepare for it. It largely depends on how quickly and effectively manufacturers can substitute other raw materials for rare earths and the fear is that, in many cases, it could be quite difficult, Tunna says.

"There could conceivably be problems getting everyday devices and it could pose a threat to quite a lot of developing technology that might have incorporated rare earths. But the bottom line is, nobody really knows quite what the implications are going to be and we're all worried."