China Defends Limits on Rare Earths Exports

China on Thursday defended its limits on exports of rare earths, after major trading partners sought litigation through the World Trade Organization (WTO) in a months-long dispute.

"China's export restrictions on rare earths are aimed at protecting environmental resources and people's health, not the protection of domestic industries," Chinese foreign ministry spokesman Hong Lei told reporters.

"In light of rare earth resources, market supply, demand and consumption, we will continue to practice management over the mining, production and export of rare earths."

The European Union, the United States and Japan on Wednesday asked the WTO to form a panel to resolve a dispute over China's export restrictions on rare earths after earlier consultations through the trade body failed.

In March, those trading partners claimed China was unfairly choking off exports of the commodities to benefit domestic industries.

China produces more than 90% of the world's rare earths, which are used in high-tech equipment from iPods to missiles, and has set output caps and export quotas on the coveted resources.

China has previously defended its practices, saying it aims to protect the resources and the environment as part of an effort to promote sustainable development.

China also said last week its regulation of the rare earths industry was in line with global trade rules.

China has so far granted companies the right to export 21,226 tonnes of rare earths this year, although such quotas are not always fully used. The government could also offer additional quotas.

In 2011, the government granted rare earth export quotas of 30,200 tons but only 18,600 tons were exported.

Copyright Agence France-Presse, 2012