China Working on 2011 Rare Earth Quota, Mofcom Says

Bloomberg （Dec 15）---China’s commerce ministry and other agencies are still working to decide rare earth export quotas for 2011, pledging once more the nation will act responsibly over the supply of these minerals to other countries.

China hopes to see more global exploration efforts to increase supply, ministry spokesman Yao Jian said at a regular briefing held in Beijing today, reiterating previous remarks.

At least 90 percent of the world’s rare earth minerals, used in electric cars, wind turbines and weapons, are produced in China. Government tightening of export controls, including yesterday’s announcement of higher export taxes, sparked a surge in prices and highlighted global dependence on Chinese shipments.

“We expect 2011 export quotas to be similar or slightly lower, compared with this year,” Peng Bo, an analyst at Guosen Securities Co., said in a telephone interview from Shenzhen.

The Ministry of Finance yesterday said China will increase export taxes on some rare earth products from next year to regulate the amount exported. The ministry didn’t elaborate on the extent of the planned increases.

China has imposed export taxes on rare earths for the past four years, although World Trade Organization rules ban export taxes, the New York Times reported today. Calls made to China’s commerce ministry seeking comment were not immediately answered.

The United States Energy Department will publish a detailed report today, which predicts that it could take 15 years to break U.S. dependence on Chinese supplies, the New York Times said. The U.S. should increase research and find alternative sources and develop recycling techniques, the report said.

Rare earth exports from China declined 77 percent in October from a month earlier, according to the General Administration of Customs on Nov. 23.

Japan, the largest rare-earth importer, has stepped up efforts to diversify supply sources, develop substitutes and recycle minerals from used products after shipments from China were disrupted in September.

--Xiao Yu and Zheng Lifei. Editor: Hugh Chow