China Raises Quotas on Rare Earth Exports

Posted July 14th, 2011 at 10:45 am (UTC-5)
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China is doubling its export quotas for rare earths – 17 elements vital to producing modern electronics and batteries. The move comes days after the World Trade Organization ruled the country had violated trade rules by limiting shipments of raw materials.

The Ministry of Commerce said Thursday on its website that the quota for the second half of this year will be about 15,700 tons, compared with 7,900 tons for last half of 2010. That brings this year’s total exports to just over 30,000 tons, about the same as last year’s total.

China controls more than 95 percent of the world’s rare earth market. In recent years, it has cut export quotas, driving up international prices and antagonizing major trading partners, such as Japan and the United States. China says it cut the quotas to conserve supplies and minimize the environmental damage caused by mining.

The WTO ruling last week covered other materials, including bauxite and zinc.

The European trade commissioner, Karel de Gucht, is visiting Beijing. He said Thursday that Chinese officials indicated they plan to appeal the ruling but would comply should they lose the appeal.

China has about one-third the world’s reserves of rare earths. It aggressively expanded production over the past 20 years, and because of lower production costs pushed many mining operations in North America, Australia and elsewhere out of business. Prices have surged, however, since China reduced exports over the past two years, and now many companies around the world are re-opening mines.