Shake-up for 'chaotic' rare earth industry
By Richard Fu |
February 17, 2011, Thursday
|
Print Edition
Print Edition
CHINA has pledged to bring order to its "chaotic" rare earth industry by introducing strict mining rules and tightening environmental standards over the next five years.
The nation will also continue to cap exports and production under a quota system and promote mergers and acquisitions in the industry, according to a statement released by the State Council, China's Cabinet, after a meeting chaired by Premier Wen Jiabao yesterday.
Wen told the meeting that China's rare earth industry had been harmed by illegal mining and "chaotic" exports.
"We will fully take into account domestic resources, production and consumption, as well as the international market, and reasonably set annual quotas for total volumes of rare earth mining production and exports," said the statement.
Even though it holds only a third of the world's reserves, China supplies more than 90 percent of rare earths.
Rare earth elements are crucial for the production of components used in high-tech products such as consumer electronics, but mining them is destructive to forests, soil and farmland. Waste released after mining also damages the environment.
Years of reckless exploitation has led to environmental damage and wasted resources, while the export front is also in chaos, the statement said.
It added that China aims within five years to establish a sustainable and healthy industry that will feature "reasonable development, orderly production, efficient usage, advanced technology and intensive development."
China has moved to curb shipments by cutting export quotas and raising tariffs, leading to a surge in rare earth prices and causing supply concerns by importers such as the United States and Japan.
But China has said it won't use the export of rare earths as a bargaining chip and its actions are aimed at conserving domestic resources and protecting the environment.
Yesterday's statement also reaffirmed China will take "international market conditions" into account when setting "reasonable" annual quotas for exports and production.
Export quotas for the first half of this year were cut by 35 percent from the corresponding period in 2010. Last year's export quota was 40 percent below that of 2009.
"China's curbs on supply are expected to keep pushing up rare earth prices this year," Guosen Securities analyst Peng Bo said.
China is set to launch a rare earth industry association in May to guide the domestic industry and lead price negotiations with foreign buyers, industry officials have said.
Soaring rare earth prices have also led to a surge in smuggling, which may already account for more than half of China's exports, Xinhua said yesterday, citing Wang Caifeng, who is setting up the industry association.
Just days ago, the Ministry of Land and Resources said China has created a "state planning" zone for rare earth mines in Jiangxi Province.
The nation will also continue to cap exports and production under a quota system and promote mergers and acquisitions in the industry, according to a statement released by the State Council, China's Cabinet, after a meeting chaired by Premier Wen Jiabao yesterday.
Wen told the meeting that China's rare earth industry had been harmed by illegal mining and "chaotic" exports.
"We will fully take into account domestic resources, production and consumption, as well as the international market, and reasonably set annual quotas for total volumes of rare earth mining production and exports," said the statement.
Even though it holds only a third of the world's reserves, China supplies more than 90 percent of rare earths.
Rare earth elements are crucial for the production of components used in high-tech products such as consumer electronics, but mining them is destructive to forests, soil and farmland. Waste released after mining also damages the environment.
Years of reckless exploitation has led to environmental damage and wasted resources, while the export front is also in chaos, the statement said.
It added that China aims within five years to establish a sustainable and healthy industry that will feature "reasonable development, orderly production, efficient usage, advanced technology and intensive development."
China has moved to curb shipments by cutting export quotas and raising tariffs, leading to a surge in rare earth prices and causing supply concerns by importers such as the United States and Japan.
But China has said it won't use the export of rare earths as a bargaining chip and its actions are aimed at conserving domestic resources and protecting the environment.
Yesterday's statement also reaffirmed China will take "international market conditions" into account when setting "reasonable" annual quotas for exports and production.
Export quotas for the first half of this year were cut by 35 percent from the corresponding period in 2010. Last year's export quota was 40 percent below that of 2009.
"China's curbs on supply are expected to keep pushing up rare earth prices this year," Guosen Securities analyst Peng Bo said.
China is set to launch a rare earth industry association in May to guide the domestic industry and lead price negotiations with foreign buyers, industry officials have said.
Soaring rare earth prices have also led to a surge in smuggling, which may already account for more than half of China's exports, Xinhua said yesterday, citing Wang Caifeng, who is setting up the industry association.
Just days ago, the Ministry of Land and Resources said China has created a "state planning" zone for rare earth mines in Jiangxi Province.
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