China Seeks Steady Rare Earths Exports In 2012

Restricted overseas shipments of rare earths will continue.

THE GIST

China produces more than 95 percent of the world's rare earths -- 17 elements critical to manufacturing everything from iPods to low-emission cars.

The government will initially allow exports of 10,546 tonnes of rare earths in 2012.

China, the world's largest rare earths producer, said Tuesday that its export quota for the sought-after commodities will remain roughly the same in 2012 as this year.

China produces more than 95 percent of the world's rare earths -- 17 elements critical to manufacturing everything from iPods to low-emission cars -- and its moves to dictate production and exports have raised an outcry among major trading partners.

"To meet the demand of the international market and maintain the basic stability of rare earth supply, the 2012 export quota will still be basically in balance with 2011," the Ministry of Commerce said.

It gave no figure for the full-year quota in 2011.

However, China exported 14,750 tonnes of rare earths in the first eleven months of this year, accounting for 49 percent of the annual quota, the ministry said in a statement on its website.

Those figures imply a 2011 quota of around 30,000 tonnes.

China has angered its trade partners by restricting overseas shipments of rare earths, in a bid to burnish its green credentials and tighten its grip over the metals.

Speculation sent rare earth prices soaring in the first half of the year but the market has since retreated, with analysts blaming excess inventory caused by slowing demand amid the global economic turmoil.

The government will initially allow exports of 10,546 tonnes of rare earths in 2012, the ministry said. That amount will be split between 11 companies, including three subsidiaries of industry giant China Minmetals Corp.

Another 20 companies were awaiting their export quotas for next year.

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In May, the State Council, or cabinet, said it would prohibit any increase in production capacity for existing projects to separate rare earths from crude ores and stop the review of applications to explore for new mines.

The Council also urged large state firms to accelerate industry consolidation and warned it will severely punish unapproved exports of rare earths.