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September 2, 2009

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China to curb exports of rare earths

CHINA plans to curb exports of rare earths, exotic metals used in computers and clean-energy products, of which the country is the only major supplier, according to news reports.

The government wants to conserve scarce resources and protect the environment, the 21st Century Business Herald and other newspapers reported, citing a proposal by the Ministry of Industry and Information Technology. They said curbing supplies could push up slumping global prices and boost China's revenue.

But a ministry spokeswoman contacted by phone said she knew nothing about such a plan.

China accounts for 95 percent of global production and about 60 percent of consumption of rare earths, which include such minerals as dysprosium, terbium, thulium, lutetium and yttrium, according to the United States Geological Survey. China supplies more than 90 percent of such materials used by American industries.

Rare earths are used in making ultra-lightweight magnets and other high-tech products.

As rumors of possible Chinese curbs circulated last month, industry publications warned they could affect manufacturers of low-energy light bulbs, disk drives, electric motors, lasers and catalytic converters.

China is limiting this year's rare earths exports to 31,300 tons, 8.1 percent less than 2008, China Business News said. It said the proposed plan calls for capping exports at 35,000 tons per year in 2010-15.

"One aspect is to protect the environment and at the same time to conserve China's rare earths resources," the newspaper said.

Newspapers noted the curbs could boost Chinese revenue by propping up prices that plunged due to weak demand amid the financial crisis.

Several reports said Japan and other consumers built up rare earths stockpiles this year at low prices. They complained that buyers got Chinese resources too cheaply.

China's demand for rare earths has surged as manufacturers shift production of computers, mobile phones and other products to factories in China.

Western miners of rare earths say Chinese export curbs could revive demand for their output.


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