Rare earth exports 'to rise slightly'

Rare earths waiting to be shipped overseas at the Port of Lianyungang in Jiangsu province. A Chinese official predicted that rare earth exports this year would be higher than in 2011. [China Daily]

China is likely to export more rare earths this year as the demand for them increases amid a decrease in their price and as the country maintains the export quotas, according to a former official in the industry.

Wang Caifeng, who was in charge of the rare earths industry at the Ministry of Industry and Information Technology, said on Monday that China, the biggest supplier of the minerals, which are used in much advanced technology, has no intent this year to greatly change the quotas on exports. In 2012, no more than 31,130 metric tons of rare earths are to be exported, only slightly more than in 2011.

In December, the Ministry of Commerce allocated the first round of 2012 export quotas for rare earths, giving nine companies that have export licenses the right to export 10,456 metric tons of the elements. It plans to grant other companies that have yet to obtain such licenses the right to export a further 14,358 tons of rare earths.

Those two rounds will account for about 80 percent of the rare earths export quotas to be given out this year.

Rare earths consist of 17 elements that are widely used in advanced technology such as hybrid cars and batteries for smartphones.

China's quotas are sufficient to meet global demand and any pressure on the country to export more will not benefit buyers, Wang said.

She said China's crackdown on illegal exploration for the valuable minerals and other measures the country has taken to regulate the industry have not reduced the supply of rare earths to the global market.

In January, the World Trade Organization ruled that China had distorted international trade by adopting policies to control exports of nine industrial materials including zinc and bauxite. Since then, some Western countries have criticized China for its restrictions on exports of rare earths and other natural resources.

Export quotas for rare earths have been used to prevent smuggling and illegal exploration in the ill-regulated industry. More importantly, the quotas allow more rare earths to be exported than are sought by global demand, meaning that they do not hamper the market at all, said an official with the Chinese Rare Earth Society who declined to be named.

The official said China will not lift the export quotas in the short term, especially since environmental issues and illegal exploration must be dealt with.

On May 19, the government announced it would strengthen regulations governing everything from exploration, processing and environmental protection to exports in the industry. It also said it would allow several big companies involved in rare earths to control the industry.

Many observers take those steps as signs of China's resolve to supervise the industry strictly.

No other big changes have followed since.

The price of rare-earth products has plunged quickly since the second half of last year, when a decreasing demand for the elements squeezed some of the industry's bubbles and wiped out speculators in the market. Buyers of rare earths also sought to reduce their use of the materials.

The average price of lanthanum oxide, a rare earth element used in rechargeable batteries and refining catalysts, was 129,167 yuan ($20,500) a ton in the fourth quarter of last year, 15 percent less than in the third quarter, according to data from Shanghai Steelhome Information.