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China tightens rules on rare earth exports

US and European countries complain to WTO

by Lu Feng 7/13/2009

China currently produces 95% of the world’s rare earth supply


CHINA has started to tighten the exportation of its rare earth resources, claiming that current cheap prices could result in the loss of all of its resources within the next 20 years.



To this end, several Chinese government bodies including the National Development and Reform Commission, the Ministry of Land and Resources, and the Ministry of Commerce (MoC), have adopted measures such as reducing exportation quotation: this year, only 20 companies have been granted an export licence (compared with 200 a year ago). On top of this comes a 10% export tariff on rare-earth metals, terbium oxide, and dysprosium oxide, and a raise on export tariff for rare-earth ore products from 10% to 15%.



China currently produces 95% of the world’s rare earth supply, and has seen its reserve drop from 88% of the world’s total 20 years ago to 52% in 2008. According to the MoC, uncontrolled competition and over-exportation has made the country’s rare earth resources lose their due value – for example in 2005 the exportation price for rare earths was 64% lower than in 1990.



“At the current speed, in another 20-30 years, China will become a country with small rare earth reserves or without reserves at all,” says Zhou Hongyu, deputy director of Hubei provincial people’s congress. “By that time we’ll have to buy rare earth from foreign countries.”



The recent moves drew complaints from the US and the European Union, who on 23 June called jointly for intervention from the World Trade Organization..

Rare earth metals are a collection of 17 different metals that occur within the same ore deposits, and are indispensable raw materials in producing semi-conductors, special steels, high-temperature alloys, and sophisticated weapons. Viewed as strategic resources, the US and Japan are currently importing large quanities from China, and stockpiling them.

http://www.tcetoday.com/tcetoday/NewsDetail.aspx?nid=11909