China will cut rare earth exports next year, a move that heightens global concerns over the country’s near-monopoly on production of the minerals.
The commerce ministry set a quota of 14,446 tonnes for the first half of 2011 – much lower than the figure issued for the first half of 2010, 22,282 tonnes, but higher than the quota for the second half, 7,976 tonnes.
The lower quota will tighten the market for rare earths, a group of 17 elements crucial for products from BlackBerry devices and iPhones to wind turbines and guided missiles.
China, which produces 97 per cent of rare earths, has reduced exports repeatedly over several years, sending prices higher and prompting a rush of investment in mines outside China.
Beijing’s curbs have prompted outcries from Japan and Europe. The US trade representative’s office said on Tuesday it would continue to push for freer trade in rare earths. “We have raised our concerns with China,” an official said.
Last week the USTR said it was continuing an investigation into whether China’s rare earths export policies constituted a violation of its commitments to the World Trade Organisation.
Beijing did not elaborate on how the quotas were calculated but the Chinese government has long maintained that restrictions on exports are essential to combat illegal mining and environmental degradation.
“These quota levels . . . are part of a unified effort to govern the sector that includes better environmental regulations, better mining regulations, and measures on all fronts,” said Niu Jingkao, deputy secretary-general of the Chinese Society for Rare Earths. He expects that prices for rare earths will continue to rise next year until they reach a level that is “reasonable”.
Industry executives were disappointed that the ministry did not make provisions to differentiate between some light rare earth elements, which are common and relatively cheap, and the more expensive heavy rare earths.
Separately, Wang Caifeng, a former government official, said on the sidelines of an industry conference that an association representing China’s rare earth mining companies could be formed as early as May.
Companies in Japan, which buys more rare earths from China than any other country, have been investing in non-China sources of supply.
Hitachi Metals last week announced a joint venture with Molycorp, a company trying to develop a rare earth mine in California, that could ultimately produce rare earth magnets in the US.
Toyota Tsusho announced a deal with India earlier in the month to build a plant to process rare earths.
No comments:
Post a Comment