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Rare earths quota unchanged
July-15-2011

China maintained its export quota for rare earths in 2011 at almost the same level as last year, a move analysts said will ease global supply fears.

Rare earth export quotas in the second half of 2011 will be 15,738 tons, said the Ministry of Commerce on its website on Thursday. That means the full-year export quota will be 30,184 tons, almost unchanged from last year's 30,258 tons.

China's exports of rare earths in the first five months of the year dropped 8.8 percent from a year earlier.

China supplies more than 90 percent of the global rare earth demand. However, its reserves account for about one-third of the world's total.

China's export restrictions on nine raw materials are inconsistent with its obligations, according to a WTO expert panel ruling issued last week. The raw materials cited in the WTO ruling did not include rare earths.

The extraction of rare earths has caused environmental damage in China and rampant mining has diminished supplies.

This led to the introduction of policies to guard against over-exploitation and since 2009 export quotas have been cut.

Export quotas were reduced by 11 percent for the first batch of rare earths this year, after they were slashed 30 to 40 percent in 2010, in a bid to protect sustainable development.

Some countries raised concerns about China's export restrictions on rare earths. The Chinese government has promised to keep the export quota at reasonable levels to conserve the precious resources and protect the environment.

Rare earths elements are crucial for the production of components used in a variety of high-tech products, but mining them can damage the environment.