China eased export curbs for rare earth elements on Thursday, restoring them near last year’s levels in a bid to appease trading partners, but the EU said the move did not ensure stable supplies and the US said the Chinese were heading in the wrong direction.
China accounts for about 97 percent of the world’s output of the 17 rare earth metals, which are crucial for global electronics production and the defense and renewable-energy industries. They are used in a wide range of consumer products, from iPhones to electric car motors.
This year’s second set of export quotas on the minerals made up for previous cuts and it came just a week after the WTO ruled against China’s curbs on a different mix of raw materials, which some trade partners say could set a precedent.
The EU and the US were not satisfied.
“This is highly disappointing and the EU continues to encourage the Chinese authorities to revisit their export restrictions policy to ensure there is full, fair, predictable and nondiscriminatory access to rare earth supplies as well as other raw materials for EU industries,” EU trade spokesman John Clancy said in an e-mailed statement.
In Washington, the US Trade Representative’s (USTR) office said China was moving in the wrong direction because Beijing’s latest move expands the scope of products covered by the quota, which for this year represented a 40 percent decrease from 2009.
“We continue to be deeply troubled by China’s use of market-distorting export restrictions on raw materials including rare earths,” USTR spokeswoman Nkenge Harmon said.
“This is not the direction that China should be headed in. We will continue our efforts to engage China in the most constructive ways possible, through both bilateral and multilateral mechanisms, to address its continued use of raw materials export restrictions,” Harmon said.
China has set the second batch of quotas at 15,738 tonnes, bringing the full-year total to 30,184 tonnes. The allocation has almost doubled from last year’s second batch of export caps of 7,976 tonnes. However, it is down a notch from last year, when China limited exports of the 17 minerals to 30,258 tonnes.
China produced 118,900 tonnes of rare earths last year.
China’s policies on rare earths are closely tracked by companies and policymakers around the world, especially as suspicions have grown that Beijing is using quotas to give an unfair advantage to its own producers.
The quota is actually being tightened because more products will compete for limited allowances, rare-earth developer Lynas said in a statement from Sydney yesterday.
There is at least a 7 percent cut in the released export quota for this year, compared with that for last year, after taking the new material into account, it said.
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