China mulls stricter environmental controls on rare earths

November 08, 2010 | 14:00

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China is considering tightening environmental standards for rare earth miners, in a move that may increase the price of exports of the vital minerals, state media reported Sunday.

The official Xinhua news agency cited Zhang Zhong, general manager of the nation's biggest rare earths firm, as saying the new regulation would increase the cost of production and "may raise the price of Chinese rare earth exports".

The report comes amid concerns in Japan and the United States that China, which controls more than 95 per cent of the global market in rare earths -- used in high-tech products from iPods to missiles -- is clamping down on exports.

It quoted Yang Wanxi, a government advisor involved in drafting the regulation, as saying the new standards aimed to force firms to upgrade their production techniques.

Yang said experts had also suggested the government consider banning producers whose annual production capacity was less than 8,000 tonnes of mixed rare earth products, the report said.

China has cut rare earth exports by five to 10 per cent a year since 2006 as demand and prices soar, in a measure it says is aimed at minimising the harmful environmental effects of mining for the minerals.

A spokesman for China's commerce ministry said last week that Beijing would further cut its export quotas for rare earth metals next year "but not by a very large margin".

But high-tech firms in Japan and the United States say China is deliberately withholding shipments of the minerals -- reportedly over a territorial row with Tokyo and a trade dispute with Washington.

Beijing has repeatedly denied this, and said last month that it would not use its near-global monopoly on the rare earths trade as a "bargaining tool".

AFP

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