Expert defends China's rare earth policy

July 5, 2012 at 2:40 PM
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BEIJING, July 5 (UPI) -- China is adhering to World Trade Organization principles regarding exports of the country's rare earths, an expert says.

"According to the principles of the WTO, a nation has the right to restrict the export of scarce resources when its reserves are diminishing or when the resource harms the environment," Han Xiaoping, chief information officer of, an Internet portal for energy information, was quoted as saying Wednesday by China Radio International.

That's the same rationale the Chinese government has repeatedly used to justify its tightening grip on rare earths.

Han's statement comes a week after the United States, the European Union and Japan jointly requested a dispute settlement panel at the WTO over China's export restrictions on rare earths. The WTO meeting is scheduled for July 10.

Although China's rare earths reserves account for one-third of global totals, it provides more than 90 percent of the world's supply of the 17 minerals, which are used in the electronics, defense and renewable energy industries.

Since 2010, China has reduced its export quotas for rare earth minerals, maintaining the restraints are justified to protect the country's natural resources and environment.

Han says the U.S., EU and Japanese complaint is aimed at pressuring China to lower its rare earth prices.

Furthermore, he believes China's restrictions will encourage other countries to search for rare earth reserves, thus helping to maintain a more stable and diverse global supply.

"If China's rare earths cost as much as it does in the United States or other countries, that's when these countries will exploit their own resources," he said.

Colorado-based Molycorp is in the process of modernizing and reopening its Mountain Pass rare earths mine in California and expects to produce 19,050 metric tons by the end of this year.

And Australian mining giant Lynas Corp. last month was granted a temporary operating license for its controversial $220 million rare earth processing facility in Malaysia. The company says the facility will meet nearly one-third of the world's demand for rare earths.

As for underwater supplies, the Indian government said this week it will soon begin to explore the ocean floor for rare earths, the International Business Times reports.

That follows an announcement by a team of Japanese researchers who said they have discovered large deposits of rare earths on the bottom of the ocean floor within Japan's exclusive economic zone. They say the estimated amount – 6.8 million tons – is enough to supply Japan with rare earths for 230 years.

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