China cuts rare earth exports, raising concerns around the world
Beijing (AsiaNews/Agencies) – “China will not use rare earths as an instrument for bargaining. Instead, we hope to co-operate with other countries in the use of rare earths on the basis of win-win outcomes and jointly protecting this unrenewable resource,” said Ministry of Industry and Information Technology spokesman Zhu Hongren when asked about growing concern over the drop in rare earth exports.
The 17 elements called rare earths possess magnetic, luminescent and other properties used in lasers, electronic components and clean energy technologies. They also have military applications.
So far, China supplied about 97 per cent of the world's demand, mining about 120,000 tonnes of rare earths in 2008. But Beijing has curtailed exports, saying it needs to protect reserves from reckless exploitation. This year it slashed export quotas to about 40 per cent below last year levels, 72 per cent in the second half of the year.
Exports to Japan have been particularly affected following a diplomatic row between Beijing and Tokyo over sovereignty in the Senkaku Islands (Diaoyu for the Chinese). Officially, the Chinese blamed red tape for the drop.
This has alarmed most industrialised nations. The European Union is looking into the possibility of taking legal action, whilst Germany has turned to the World Trade Organisation (WHO) to see whether any rules have been broken or not.
Yesterday, at a press conference with Japanese Foreign Minister Seiji Maehara, US Secretary of State Hillary Clinton urged Beijing to clarify its position. She also urged the world to develop additional supplies. The issue is likely to come up at the next G20 meeting.
In the past two decades, little exploration has been done in rare earth metals since Chinese production was more than adequate to meet world demand at a reasonable cost. In 2010, prices of some rare earths have increased tenfold on world markets. Many are concerned about possible shortages, and mining firms are scrambling to speed up development timetables.
In fact, mining and exploration outside of China were abandoned because of low prices. Now that the trend is reversing, non-Chinese production can be expected to rise.
In responding to all the concerns, Industry and Information Technology Ministry spokesman Zhu reiterated his country’s position, namely that “China has exercised orderly management of the exploitation, production and export of rare earths, [. . .] in line with WTO rules”.
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