China Denies Blocking Rare Earth Exports to Japan

China supplies at least 95% of the world's rare earth minerals.

Amid a row between the regional heavyweights over a Chinese boat captain detained in disputed waters, China on Sept. 23 denied a report that it had blocked exports of rare earth minerals to Japan.

The commerce ministry denial came after The New York Times, citing unnamed industry sources, reported China had halted all shipments of the elements to Japan. "There is no such matter," Chen Rongkai, an official at the commerce ministry, said. "I don't know where they got this. Everything is going on as normal."

Rare earths are essential for making iPods, electric cars, missiles and a range of other products.

China supplies at least 95% of the world's rare earths. It had previously placed restrictions on exports of the minerals, sending market prices soaring and sparking concern among foreign governments and companies.

If exports were being halted, it was probably because China had already reached the lowered annual limit, an industry source, who asked to remain anonymous, said.

Japan's foreign ministry did not answer calls for comment on the report.

An unnamed Japanese government official was quoted on Japan's Jiji Press agency as saying: "We have not been informed by the Chinese side that they have banned the exports."

Japan and China are embroiled in their worst diplomatic row in years, sparked by the fishing boat captain's arrest after a September 7 collision between his trawler with two Japanese coastguard vessels in the East China Sea. Chinese Premier Wen Jiabao this week threatened "further actions" if the captain was not released. Beijing has already suspended high-level contacts with Tokyo and called off several official visits.

Last month, before the row erupted, Japan had urged China to expand rare earths exports.

Market prices of some types of rare earth metals have soared more than 20% since China announced in July that it planned to reduce global shipments.

Previous media reports said the country was considering banning the export of certain elements and closing mines, which foreign companies and governments fear will deny them access to the much-needed metals and force manufacturers to shift their plants to China.

Copyright Agence France-Presse, 2010

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