China Considering New Export Quotas on Rare Earth Alloys

A report from Dow Jones Newswires on Dec. 30 said that China is considering new export quotas on rare earth alloys -- a move that would further restrict shipments of the minerals used in a variety of high-tech industries.

The country -- which has a near-monopoly in the industry -- is also mulling separate export quotas for heavy and light rare earths, Dow Jones Newswires reported, citing an unnamed official with knowledge of the plans. The commerce ministry declined to comment on the report.

So far, China has issued a single export quota for rare earths -- 17 elements critical to manufacturing everything from iPods to low-emission cars, wind turbines and missiles.

The commerce ministry on Dec. 28 announced a 35% cut in rare earth exports for the first half of 2011 compared to a year earlier, having slashed the quota by 72% for the second half of this year. But the government has so far yet to limit exports of rare earth alloys, which are compounds that include rare earth elements.

Foreign ministry spokeswoman Jiang Yu said on Dec. 30 that China would continue to supply rare earths to the global market but called on other countries with reserves to also "shoulder the responsibility."

Jiang said China was looking for alternative rare earth resources and welcomed "countries with sophisticated technology to provide assistance."

The official did not specify when the new quotas -- which would close loopholes by which exporters can sidestep current regulations -- might be finalized.

Rare earths are usually categorized into two kinds, giving exporters more incentive to ship the more precious and lucrative heavy rare earths for higher returns. A new split quota would effectively end that practice.

Industry officials said China had already stepped up scrutiny of exports of the alloys in recent months, ordering that shipments of those containing more than 10% rare earths be reported to customs authorities, the report said.

Japanese firms such as Mitsui & Co. have been massively buying waste glass rich in rare earth elements from China to evade increasingly stiff curbs on the raw minerals, the 21st Century Business Herald said on Dec. 30. China banned exports of 22 rare earths-rich products including cullet and polysilicon from November, it said.