China Defends Rare Earth Curbs

Dec. 16, 2010
The country produces more than 95% of the world's rare earths.

Explaining that it was protecting the environment, China defended its curbs on rare earth materials, as a U.S. panel warned of a shortage without concerted action to secure the precious metals.

China produces more than 95% of the world's rare earths -- the elements, generally mined, that are crucial in products ranging from iPods to low-emission cars to turbines for wind power.

On a visit to Washington to discuss tense trade ties, Commerce Minister Chen Deming denied that China had any political intentions in curbing exports of rare earths.

"Environmental concern is the sole reason why China reduced the output of rare earths," Chen said He said Beijing was complying with World Trade Organization rules and has restricted domestic supply as well.

Chen pointed out that despite China's near monopoly on production, rare earths were found around the world. U.S. government studies have found that about one-third of reserves are in China.

"For a country with only 31 of the world's rare earths reserves to be supplying more than 90% to the rest of the world, it would lack conscience for other countries to complain about that and try to politicize it," Chen said.

"Many other countries in the world, countries that have a similar territorial size as China, also possess a lot of rare earths' reserves. Yet so far, they haven't tapped into their reserves," he said.

Concerns grew around the world earlier this year when Japanese companies said that China had cut off rare earths supply amid a flare-up in a territorial dispute between Asia's two largest economies.

On Dec. 14, China said that it would raise export duties on some rare earth products next year.

A U.S. Energy Department study released earlier on Dec. 15 urged the United States, which has 13% of global reserves, to get to work to secure rare earths including by loosening bureaucratic hurdles to new mines. The study said that environmental codes were expected to prevent new mines from opening up in Australia, Canada and the United States for dysprosium -- the most at-risk rare earth which has applications in electric vehicles. The report predicted a "substantial increase" in demand for rare earths as more countries embrace clean technology, even though the United States has limited supply options.

"Left unaddressed, this reality will severely hamper the United States' ability to transition to a clean energy economy," it said.

The study recommended that the United States consider financial assistance for the domestic processing and manufacturing of rare earths. It also called for greater recycling of materials, along with diplomacy to ensure supply.

David Sandalow, the U.S. assistant secretary of energy for policy and international affairs, said that the United States needed to ramp up research on rare earths. In recent months, the United States has held workshops with Japan and the European Union to step up technical cooperation.

"Today there are thousands of researchers working on this issue in China. There are dozens in the United States," Sandalow said as he presented the report at the Center for Strategic and International Studies think-tank.

The report found the least risks in the supply of lithium, with Chile the largest producer of the element used in hybrid cars, and samarium, which has military uses.

Copyright Agence France-Presse, 2010

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