Chinese envoy defends limits on rare earths

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A top Chinese diplomat on Tuesday (19 March) defended his country’s efforts to curb exports of rare earth metals and other vital industrial raw materials to Europe, saying extensive mining had caused environmental problems.

Zhang Lirong, China’s deputy ambassador to the European Union, said restraints that the European Union and United States claimed violated world trade rules were “in line with the environmental standards we have adopted.”

“The measures we have taken are a part of the growing awareness of the need for environmental protection and sustainable production,” the envoy told an industrial gathering in Brussels.

Beijing lost an appeal at the World Trade Organization last year in challenges brought by the EU, United States and several other countries. The importers claimed that China was restricting delivery of industrial materials such as bauxite, coke, magnesium, manganese, silicon metal, yellow phosphorus and zinc.

The countries argued that by reducing exports, Chinese businesses were benefiting from reduced prices for raw materials. China is the leading producer of rare earth metals and other minerals vital to the electronics, aviation and technology industries.

The European Commission, in its 2013 Trade and Investment Barriers Report, said that despite Chinese promises to comply with the WTO ruling, roadblocks remained.

Chinese officials have argued that better controls over mining and production of minerals and metals was essential to address worsening environmental and health conditions that have fuelled public anger. Recently, Beijing announced it would take steps to tackle urban air pollution that has choked the capital and other cities this winter.

But WTO ruled that China, which joined the trade group in 2001, was “unbable to demonstrate that its export duties and quotas would lead to a reduction of pollution in the short- or long-term and therefore contribute towards improving the health of its people.”

'Fair, just' trade

Without referring directly to the WTO ruling against his country, Zhang said China supported “a fair, just, non-discriminatory trading regime” for raw materials and called for resolving disputes “through negotiation and not trade retaliation.”

The Chinese diplomat told the European Raw Materials Conference in Brussels that his country was committed to supplying resource needs to European businesses.

“China will continue to supply the world market and calls on other supplies of raw materials to share their materials,” Zhang said.

Guy Thiran, director-general of Eurometeaux, which represents the non-ferrous metals industry, said Europe needs to build its mining industry in response to supply concerns and improve the reuse of metals.

Thiran spoke at the conference along with others who called for improving European competitiveness in the face of dominance of rare earth metals and other materials by China and a few other producers.

The European Commission recently launched a European Innovation Partnership on Raw Materials aimed at spurring research, technological development and investment in recycling of high-demand industrial metals and minerals.

The action was part of broader calls for a re-industrialisation of Europe amid closures of recession-hit automotive, steelmaking and other industrial plants.

Speaking at the 3rd Annual Raw Materials Conference in Brussels, Kevin Bradley, president of the Nickel Institute, said: "It's important to remember that the EU competes with the US, China and the rest of the world. We need a global level playing field - not just a European one. It is in the interests of European jobs, innovation and competitiveness to ensure that EU policymakers focus on practical synergies around resource efficiency and competitiveness."

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.

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