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China denies any rare earth mineral export embargo

Recent interruptions in exports of rare earth minerals are due to a sharp cut in export quotas announced last July, argue China and rare earths analysts.

By Staff writer / October 20, 2010

In this undated photo, chunks of chemically processed rare earths are shown in Beijing. China's recent halt of exotic metal shipments to Japan amid a diplomatic spat has reverberated throughout the world's high-tech manufacturing hubs.

Kyodo News/AP Photo

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Beijing

China sought Wednesday to reassure the world it had not and would not use its chokehold on supplies of critical rare earths for political purposes, and pledged to maintain its exports.

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“China will continue to supply rare earths to the world,” the Commerce Ministry said in a faxed statement, denying earlier reports in the official China Daily newspaper that the government planned to cut exports next year by 30 percent.

While insisting that politics is not being played with the class of minerals, the government nevertheless has been cutting exports for the past three years. Rare earth elements are crucial to the manufacture of many high-tech items, from smart bombs to mobile phones to wind turbines. China mines 97 percent of the world’s supply.

Related story: Why China's lock on market for rare earth elements matters

In a separate statement, a Commerce Ministry spokeswoman who identified herself only as Ms. Chen denied a report in The New York Times that China had halted shipments of rare earths to the United States and Europe.

“China has not imposed any embargo,” she said. The report followed suggestions last month that China had banned rare earth exports to Japan.

Market control, nothing personal

Any recent interruptions in exports of rare earths were due to the export quota cut in July argues Mary Zhang, a rare earths analyst with Asian Metals, a Beijing based market research firm. “Export quotas are very tight,” she says.

Some exporters have exhausted their annual quota and others “do not want to accept orders at the moment because they are expecting higher prices,” Ms. Zhang says.

China slashed its six month export quota by 72 percent in July, arguing the country needed to protect its supplies for the future.

The world woke up to China’s control of the world market in the 17 strategically and economically important rare earth elements following reports last month that China had suspended sales of them to Japan during a territorial dispute.

Questions of motive

The Japanese trade minister has accused China of imposing an embargo, which Beijing has denied.

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