China says half of rare earth exports go to Japan, admits export quota cutsNovember 22, 2010
By Alex He | November 16, 2010 6:13 PM EST
In the first nine months of this year, China exported 16,000 tonnes, or 49.8 percent, of its total rare earth to Japan, representing 167 percent rise year on year, the Ministry of Commerce (MOC) spokesman Yao Jian said on Tuesday.
The country’s rare earth export to U.S. amounted to 6.2 thousand tonnes, or 19 percent, during the same period. It represents 5.5 percent increase year on year.
From January to September, China exported 32,200 tonnes of rare earth at an average price of 14.8 thousand dollars per tonne.
Despite producing 80-90 percent of the world’s rare earths, China has only around 30 percent of the world’s proven reserves, Yao said.
China does not deny reducing the quota for rare earth metal exports. Yao said China cut its 2010 rare earth export quota 39 percent year on year while rare earth development and production capacities were reduced by 25 percent and 23 percent, respectively.
Yao, however, insists China is doing so “concerning the development, production and export of rare earth out of concern for the environment” and such reductions are in line with World Trade Organization (WTO) rules.
China, which has had a near-monopoly on the production of rare earth metals for years, has drawn criticism from Japan, the U.S. and the European countries. They said China’s restrictions on rare earth exports did violate the WTO rules.
According to The Economist, “Slashing their exports of rare-earth metals…is all about moving Chinese manufacturers up the supply chain, so they can sell valuable finished goods to the world rather than lowly raw materials.”
Rare earth metals are crucial to many of the world’s most advanced technologies, such as cellular phones, high performance batteries, flat screen televisions, green energy technology, and are critical to the future of hybrid and electric cars, high-tech military applications and superconductors and fiber-optic communication systems.
However, the mining, refining and recycling of rare earth are highly-polluting processes.
China hopes other rare earth-rich nations will develop their own resources while adding that China is ready to cooperate with other nations to mine and process rare earth in an environmentally-friendly way, Yao concluded.
Late last month, the first U.S. exchange-traded fund (ETF) investing in companies that produce rare-earth elements and other strategic metals began trading this morning on the NYSE Arca Stock Exchange. The ETF tracks an index comprising of 24 mining companies including Iluka Resources Ltd., the world’s biggest zircon producer, China Rare Earth Holdings Ltd., a Hong Kong-based manufacturer and wholesaler of rare-earth products; and Titanium Metals Corp.
Writing in the 24/7 Wall St. blog, John Ogg comments that rare earth elements are not exactly “rare” by definition. “What is rare about them is that the quantities of locations capable of being mined at cost-effective commercialization are rare,” Ogg said.