Tags: China | Rare | Earth | Producers

China Cracks Down on Small Rare-Earth Producers

Monday, 06 August 2012 10:08 AM

China on Monday issued new rules to crack down on small-scale rare-earth producers, the latest attempt to rein in the unruly industry that has drawn ire from trade partners who say Beijing's export curbs on the minerals are unfair.

China, which produces more than 90 percent of global supply of the 17 elements used in defense, electronics and renewable-energy industries, has long vowed to consolidate production under big state-owned companies and curb illegal production.

Mixed-production rare-earth mines must have yearly output of no less than 20,000 tonnes a year, China's Ministry of Industry and Information Technology said in a document posted to its website.

It also gave minimum yearly extraction thresholds for specific rare earths and prohibited the mining of single elements. Rare earth smelting plants, it said, must have a minimum output of 2,000 tonnes a year.

The new rules are to "protect rare-earth resources and the environment and promote industry restructuring," the ministry said.

China has long said that mining rare-earths damages its environment and argues that it should not be expected to produce more than 90 percent of total global output with just a quarter of global rare-earth reserves.

However, critics say its export cap has given domestic companies an unfair competitive advantage and violates World Trade Organization rules.

The WTO said in July that it would investigate complaints made by Europe, Japan and the United States that China's curbs on exports of the metals is designed to hold down prices for domestic manufacturers and pressure international companies into moving operations to China.

© 2020 Thomson/Reuters. All rights reserved.

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Monday, 06 August 2012 10:08 AM
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