China mulls export quotas on rare earth alloys

The country -- which has a near-monopoly in the industry - is also mulling separate export quotas for heavy and light rare earths, Dow Jones Newswires reported, citing an unnamed official with knowledge of the plans.

The commerce ministry declined to comment on the report when contacted by AFP.

So far, China has issued a single export quota for rare earths - 17 elements which are critical to manufacturing everything from iPods to low-emission cars, wind turbines and missiles.

Beijing has moved to tighten controls over the minerals by cracking down on heavily polluting producers, cutting quotas for overseas shipments and hiking export taxes.

The commerce ministry on Tuesday announced a 35 per cent cut in rare earth exports for the first half of 2011 compared to a year earlier, having slashed the quota by 72 per cent for the second half of this year.

But the government has so far yet to limit exports of rare earth alloys.

Rare earths are usually categorised into two kinds, giving exporters more incentive to ship the more precious and lucrative heavy rare earths for higher returns. A new split quota would effectively end that practise.

The official did not specify when the new quotas -- which would close loopholes by which exporters can sidestep current regulations -- might be finalised.

Industry officials said China had already stepped up scrutiny of exports of the alloys in recent months, ordering that shipments of those containing more than 10 per cent rare earths be reported to customs authorities, the report said.

Japanese firms such as Mitsui & Co. have been massively buying waste glass rich in rare earth elements from China to evade increasingly stiff curbs on the raw minerals, the 21st Century Business Herald said Thursday.

China banned exports of 22 rare earths-rich products including cullet and polysilicon from November, it said.