China to Boost Internal Use of Rare Earths in Manufacturing

Feb. 23, 2012
Goal is to limit exports of these resources

China has called for greater use of rare earths for its own domestic manufacturing, as Beijing seeks to limit exports of the sought-after resources vital for everything from iPods to missiles.

China is the world's largest producer of rare earths -- 17 elements critical to manufacturing a range of high-tech products -- and its moves to dictate production and exports have raised a global outcry.

Beijing aims to boost the use of rare earths in high-end manufacturing, said the Ministry of Industry and Information Technology, which helps oversee the modernisation of Chinese industry.

The nation will "give full play to China's dominant position of rare earths resources to expand the scale of the rare earths new materials industry," it said in a development plan for 2011-2015 posted on its website on Feb. 22.

Analysts said the move was aimed at using more rare earths domestically instead of exporting them. "This has sent a clear signal that China does not encourage exporting rare earths," said Sang Yongliang, an analyst at Guotai Junan Securities. "It is in the interest of China to export processed products instead of raw materials," he added.

To build up the industry, the government will seek to develop manufacturing centers in the capital Beijing and the northern region of Inner Mongolia, which has huge reserves of rare earths and is a key producer, the ministry said.

The other major production bases will be in the eastern provinces of Jiangxi and Zhejiang, the southeastern province of Fujian and the southwestern province of Sichuan, which are also rich in the sought-after elements, it said.

China has angered its trade partners by restricting overseas shipments of rare earths, which critics say is aimed at driving up global prices and forcing foreign firms to relocate to the Asian country to access the metals. But Beijing says the restrictions are necessary to conserve the natural resource, limit harm to the environment from excessive mining and meet domestic demand.

The government has set its 2012 export quota for rare earths at around 30,000 tons, the same level as 2011. However, exporters only filled roughly half the quota last year.

State media said earlier this month that China is bracing for renewed calls to ease its rare earths controls after the World Trade Organization ruled Beijing's limits on key raw material exports broke trade rules.

Copyright Agence France-Presse, 2012

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