Rare metal exports will not be used as a bargaining tool: China

Last Updated: Friday, October 29, 2010 - 13:48

Beijing: As US sought an explanation on
restrictions imposed by China for the export of rare earth
metals, a vital component for numerous high-tech industries,
Beijing has said it will not use them as a diplomatic
"bargaining tool".

China, the largest exporter of the metals, also said
that its measures to restrict the exploitation, production and
export of rare earths are in line with World Trade
Organisation rules.

Zhu Hongren, spokesman for the Ministry of Industry
and Information Technology, said, "China will not use rare
earths as an instrument for bargaining".

"Instead, we hope to cooperate with other countries in
the use of rare earths on the basis of win-win outcomes and
jointly protect the non-renewable resource," he said.

Zhu made the remarks after US Secretary of State
Hillary Clinton yesterday said that it would welcome any
clarification of China`s stance on rare earths and encourage
countries affected to "seek additional supplies".

China has cut export quotas for rare earths, vital for
the production of a range of high-tech products saying that
its reserves slumped, due in part to smuggling.

There were earlier reports that it would further cut
quotas next year, but the Ministry of Commerce denied the
reports, state-run China Daily reported.

Zhu defended the restrictions on rare earth exports,
saying that they are for long-term development.

During the past few months some countries, such as
Japan, have expressed fears over China slashing exports next
year. The US and European Union said earlier this week that
they were pressing for solutions.

The issue is expected to be discussed at next month`s
G-20 summit in South Korea.

Rare earth metals are comprised of 17 elements and are
vital in the production of high-tech products such as lasers,
missiles, computers and superconductors.

China has 36 per cent of the world`s rare earths but
supplies about 97 per cent of world demand, pointing to an
obvious over-exploitation.

The US accounts for 13 per cent and Russia 19 per cent
of global reserves, but they have largely stopped production
since they can import the minerals from China at low prices
while protecting their own stocks and environment, Chinese
analysts said.

Japan, meanwhile, has imported large amounts of the
minerals from China and kept part of the imports as "rainy
day" reserves. China also kept a wary eye on India-Japan agreement
reached during Prime Minister Manmohan Singh`s visit to Tokyo
to step up cooperation in the rare earth metals.

Zhu said that China`s over-exploitation of the metals
has created many environmental problems, which justifies the
country`s production and export control policies.

The Commerce Ministry said China`s reserves of medium
and heavy rare earths may only last 15 to 20 years at the
current rate of production, which could lead to China being
forced to import supplies.

The Ministry of Foreign Affairs said on Tuesday that
it is China`s legitimate right to manage its own reserves.

PTI



First Published: Friday, October 29, 2010 - 13:48

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