China’s rare earth export cut raises trade concerns
China has raised fresh international trade concerns after slashing export quotas on rare earths minerals, risking action from the United States at the World Trade Organisation.business Updated: Dec 29, 2010 23:48 IST
China has raised fresh international trade concerns after slashing export quotas on rare earths minerals, risking action from the United States at the World Trade Organisation.
China, which produces about 97% of the global supply of rare earth minerals, cut its export quotas by 35% for the first half of 2011 versus a year ago, saying it wanted to preserve ample reserves, but warned against basing its total 2011 export quota on the first half figures.
The US Trade Representative’s office was “very concerned” about China’s export restraints on rare earths and had raised its concerns with China, a spokeswoman said. US makers of high-tech products such as Apple Inc’s iPads, along with Japanese companies have been scrambling to secure reliable supplies of the minerals outside of China as Beijing steadily reduces export allocations.
Japan’s Sony Corp said China’s move to cut export quotas was a hindrance to free trade and that it would work to reduce its reliance on Chinese supplies. “At this point in time there is no direct impact on our company. But further restrictions could lead to a shortage of supply or rise in costs,” Sony said.
At present, world demand for rare earths is about 110,000 tonnes a year. It is set to more than double to 250,000 tonnes by 2015, according to industry estimates. “Concerned parties should not estimate full-year quotas for rare earth minerals just by looking at the first set of quotas,” China’s ministry of commerce said.
First Published: Dec 29, 2010 23:45 IST