Rare Earth Metals

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China’s Rare Earth Policies Getting More Scrutiny
OCTOBER 20, 2010, 7:27 AM ET
By Dave Kansas
http://blogs.wsj.com/marketbeat/2010/10/20/chinas-rare-earth-policies-getting-more-scrutiny/
News out of China gets curiouser and curiouser ahead of the looming G20 confabs. Finance ministers meet this weekend in South Korea, state leaders next month in the same place.

Today, scuttlebutt about China reducing exports of rare earths to the U.S. and Europe. Japan already seems to be on the short end of the rare earths export list following a naval squabble over disputed islands.

Rare earths aren’t altogether rare, but they are extremely crucial to lots of high-tech manufacturing. China has a veritable lock on the market, and investors are growing concerned that maybe China is using that stranglehold position to persuade folks to see the world their way.

China, however, is insisting that the rare earths will continue to flow.

Here’s what Dow Jones’ Owen Fletcher and Yajun Zhang reported earlier today:

China’s Ministry of Commerce said Wednesday that China will continue to restrict exploitation, production and exportation of rare earths to ensure sustainable development, and that its curbs comply with World Trade Organization rules, according to a report by state-controlled Xinhua News Agency.

China will base 2011 export quotas on rare earth output, market demand and needs for sustainable development, Xinhua cited the ministry as saying Wednesday.

The ministry said via Xinhua that a Tuesday report in the state-run China Daily, which quoted an unnamed Commerce Ministry official suggesting that cuts of as much as 30% from already-trimmed 2010 levels are possible, was untrue.

“China will continue to supply rare earth to the world,” Xinhua quoted the ministry as saying.