China to shake up rare earth industry

China plans to "streamline" its rare earth industry within five years, state media on Wednesday quoted Premier Wen Jiabao as telling a cabinet meeting.

China to shake up rare earth industry

China will shake-up its rare earths sector over the next five years, Premier Wen Jiabao said on Wednesday, as the country steps up controls over the production of the vital metals that have worried importers.

China, which produces about 97 percent of the global supply of the minerals used in smartphones, electric car motors and high-tech industrial equipment, cut export quotas by 40 percent last year, a move that alarmed buyers and trading partners.

Wen told a Cabinet meeting that the country's rare earth industry had been harmed by illegal mining and "chaotic" exports, though he added China would set "reasonable" quotas for mining volumes and exports.

"We will fully take into account both domestic resources, production and consumption as well as the international market, and reasonably set annual quotes for total volumes of rare earth mining production and for exports," said an official account of the meeting carried on the central government's website (http://www.gov.cn).

It will take five years for China to create an orderly and efficient rare earths sector, the statement cited Wen as saying.

China has cut export quotas for the first half of 2011 by 35 percent from the first half of last year, although total quotas for this year have not yet been announced. China says the quota cuts will prevent reckless and polluting mining of deposits.

China's moves have raised hackles in major trading partners such as the United States, European Union and Japan. The U.S. Trade Representative office has threatened to take China to the World Trade Organisation about its export restraints. .

The rare earths issue adds to the growing list of trade-related disputes between China and the United States, including U.S. complaints that China's currency is undervalued.

U.S. makers of high-tech products such as Apple Inc's iPads and various Japanese companies have been scrambling to secure reliable supplies of the minerals outside China as Beijing steadily reduces export allocations.

The official China Securities Journal reported on Wednesday that China would soon publish rules to strengthen supervision of the country's rare earths industry in a move that was likely to "drastically" change the landscape of the sector.

New rules will require Chinese rare earth producers to make better use of natural resources, reduce pollution, control the scale of mining and adopt more advanced mining technologies, said the newspaper, citing unidentified government sources.

The regulations will also encourage consolidation of China's rare earths industry, it added.

China's International Business Daily reported on Tuesday that the country was likely to create a rare earth industry association in May to help its miners obtain more pricing power in the global market.

Reuters

Last Mod: 16 Şubat 2011, 13:11
Add Comment