News / Asia

China's Rare Earths Export Quota Cuts Triggers Concerns

A worker waters the site of a rare earth metals mine at Nancheng county of Jiangxi province, China, 29 Dec 2010
A worker waters the site of a rare earth metals mine at Nancheng county of Jiangxi province, China, 29 Dec 2010

An announcement this week by China that it plans to cut export quotas for rare earth minerals next year is raising concerns about future supplies of the increasingly sought after natural resource that is a crucial component in a wide range of high-tech goods. The move is sparking trade concerns and helping boost the hunt for and production of rare earths outside of China.

Right now, about 97 percent of the world's production of rare earth minerals is located in China.

So, when China announced this week that it was cutting its quotas for the export of rare earths,  countries and companies that rely on the elements for the production of everything from high-tech electronic devices to electric cars, wind turbines and defense systems began voicing objections.

Japan's electronics giant Sony says the move is a hindrance to free trade and says it will try to reduce its reliance on Chinese supplies.

U.S. representatives at the World Trade Organization say they're "very concerned" about the restraints and have raised the issue with China. The U.S. says it may complain to the WTO about China's export restraints.

China argues that its export controls are in line with World Trade Organization rules.

Foreign Ministry spokeswoman Jiang Yu says the measures are necessary to protect China's environment and supply of resources. She adds that in the future China will continue to provide rare earth products to the international market.

Concern over the export of rare earth minerals has been building in recent months.

China slashed export quotas for the minerals in the second half of 2010, citing a shortage of supply for domestic manufacturers.  And, when it was embroiled in a diplomatic dispute with Tokyo, shipments of the minerals to Japan were temporarily interrupted.

Listen to the extended interview with Gabe Collins


Gabe Collins, the co-founder of China www.chinasignpost.com, a Web site that focuses on China research and analysis, says that he does not believe China will let the issue cause too much unnecessary friction in its relations with other countries.

But, he adds that if there is some dispute again with Japan, the rare earths issue could come up again. China and Japan are the two major rare earth component producers in the world.

China's moves to cut quotas, Collins says, are ultimately reflection of its industrial policy.

"What they are trying to do. There is two things," said Collins. "One, is you're seeing more and more electronics manufacturing in China, that's keeping rare earths at home by itself. The second thing is you're seeing, this is a manifestation of a Chinese industrial development policy. Namely, they want to keep they want to keep the higher value added steps of the manufacturing chain in China."

In a recent China SignPost report on China's rare earth minerals and the debate it is sparking, Collins suggests that the U.S. start building up a strategic reserve of the minerals. He also says the U.S. and other governments should discuss the issue with China at high-level meetings.

"Given the strategic nature of these elements. How critical they are both to defense applications and a lot of the commercial applications, I think this would certainly be a subject that would be very much worth putting on the agenda for example in the Strategic and Economic Dialogue with China, perhaps some of the WTO discussions between members of the European Union, China, Japan and the United States."

While the decision is raising concerns from governments, it is giving companies outside of China that are already in the business of mining rare earth minerals or working to restart projects a big boost.

Companies such as Australia's Lynas Corporation and the U.S.-based Molycorp have seen their share prices shoot up since the decision was announced.

Molycorp resumed operation of its rare earth metal facility in California last week. The site was shut down in 2002 amid environmental concerns and low costs for rare earth metals from mines in China.

The U.S. state of Alaska and others are actively assessing the prospects for the mining of rare earths.

Bob Swenson is the director of Alaska's division of geological and geophysical surveys.

"The Bokan area is actually the only known minable occurrence of rare earth elements in Alaska. We do have many areas specifically in interior Alaska as well as down in southeast Alaska where we do have indications of permissible geology for rare earths and those are the areas we've really been focusing on," he said.

In November, the U.S. Geological Survey carried out its first-ever assessment for rare earths and found that deposits that total about 13 million metric tons had been found in 14 states.

World demand for rare earths is currently at about 120,000 metric tons per year, with China accounting for most of that demand. The remainder is split between Japan, the United States and Europe.

You May Like

Turkey's Controversial Reform Bill Giving Investors Jitters

Homeland security reform bill will give police new powers in search, seizure, detention and arrests, while restricting the rights of suspects, their attorneys More

Audio Slideshow In Kenyan Prison, Good Grades Are Path to Freedom

Some inmates who get high marks could see their sentences commuted to non-custodial status More

'Rumble in the Jungle' Turns 40

'The Champ' knocked Foreman out to regain crown he had lost 7 years earlier when US government accused him of draft-dodging and boxing officials revoked his license More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Victorious Secularists Face Challenge to Form Government in Tunisiai
X
Henry Ridgwell
October 30, 2014 11:39 PM
Official results from Tunisia show the Islamist Ennahda party has failed to win the second free election since the so-called "Arab Spring" uprising in 2011. Ennahda, which handed power to a government of technocrats pending the elections, lost out to the secular party Nidaa Tounes. Henry Ridgwell reports from London that the relatively peaceful poll offers some hope in a volatile region.
Video

Video Victorious Secularists Face Challenge to Form Government in Tunisia

Official results from Tunisia show the Islamist Ennahda party has failed to win the second free election since the so-called "Arab Spring" uprising in 2011. Ennahda, which handed power to a government of technocrats pending the elections, lost out to the secular party Nidaa Tounes. Henry Ridgwell reports from London that the relatively peaceful poll offers some hope in a volatile region.
Video

Video Africa Tells its Story Through Fashion

In Africa, Fashion Week is a riot of colors, shapes, patterns and fabrics - against the backdrop of its ongoing struggle between nature and its fast-growing urban edge. How do these ideas translate into needle and thread? VOA’s Anita Powell visited this year’s Mercedes Benz Fashion Week Africa in Johannesburg to find out.
Video

Video Smugglers Offer Cheap Passage From Turkey to Syria

Smugglers in Turkey offer a relatively cheap passage across the border into Syria. Ankara has stepped up efforts to stem the flow of foreign fighters who want to join Islamic State militants fighting for control of the Syrian border city of Kobani. But porous borders and border guards who can be bribed make illegal border crossings quite easy. Zlatica Hoke has more.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.

All About America

AppleAndroid