China plans tighter controls of rare earth sector

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China will abide by the outcome of an ongoing World Trade Organisation (WTO) investigation into its policies for the rare earths sector, but will continue to tighten regulation of the industry, an industry ministry spokesman said today (25 July).

The WTO confirmed that it would establish a panel to look into complaints made by the European Union, Japan and the United States over China's curbs on exports of rare earths, a group of 17 elements used in advanced technologies for the defence, electronics and renewable-energy industries.

Zhu Hongren of the Ministry of Industry and Information Technology said China would abide by any decision made by the WTO, but the country must continue to tighten regulation in the sector.

Whatever the WTO says, he said, “the Chinese government must be able to reasonably conserve its rare earth resources, and must ensure that these scarce rare earth materials make a greater contribution to humanity under the framework of environmental protection and sustainable development."

Zhu added that Beijing would continue to crack down on illegal production, the use of outdated technology, and consolidate production under big state-owned companies.

China accounts for more than 90% of global output of the 17 rare earths. The three powers have accused Beijing of trying to hold down prices for domestic manufacturers and pressure international companies into moving operations to China. The EU and United States say this hurts their producers and consumers, as foreign companies pay up to twice as much as Chinese companies for rare earth metals.

Zhu said a number of foreign countries, many of which had significant rare earth deposits of their own, had repeatedly failed to acknowledge the environmental damage caused by rare earth production and had "groundlessly condemned" China's policies.

In March, China described the trade complaint as unfair, arguing that it only controlled 90% of global production because other countries had long ago closed their own rare earths refineries because of pollution concerns.

China issued 30,184 metric tonnes of export quotas last year, and has said the allocation was more than ample, with actual exports reaching just 18,600 metric tonnes over the year. It has issued 21,226 metric tonnes in quotas so far this year, and said the full-year allocation would remain about the same as last year.

The European Commission has identified many so-called rare-earth minerals as well as metals like cobalt in its lists of 14 economically vital raw materials that are prone to supply disruption.

Europe depends on imports for nearly all of its rare-earth metals. Though many are in abundant supply on the planet, the metals are often dispersed or difficult to access, and despite their importance to green energy, require intensive mining and processing.

China controls more than 90% of the market.

European Union

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