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Tensions Build over Chinese Rare Earth Quotas
China’s recent announcement that it would further tighten its rare earths export quotas came as a surprise to trading partners, as the move came on the heels of a WTO decision finding that similar restrictions on raw materials violate trade rules. Meanwhile, China is still debating whether to appeal the raw materials ruling, as the deadline for appeal is 2 September 2011.
Last week, Beijing notified the quotas that would apply during the second half of 2011. While the annual amount keeps up with last year’s numbers, a new product - ferro-alloys - has been added to the list, effectively tightening the quotas.
“This is highly-disappointing,” said the EU Trade Spokesperson John Clancy. “The EU continues to encourage the Chinese authorities to revisit their export restriction policy to ensure there is full, fair predictable and non-discriminatory access to rare earth supplies as well as other raw materials for EU industries.”
Rare earths are elements needed in the high technology industry, such as for manufacturing wind turbines, mobile phones, or computers. China currently fulfils more than ninety percent of global demand for these elements; however, last year Beijing started to severely restrict its exports. The extraction of rare earth is highly complicated and polluting - one reason why most Western countries closed down their extraction plants in the nineties when China increased its production.
The rising prices of rare earth metals have been no coincidence, however. China has purposely cut back on exports - by as much as 40 percent, according to some estimates - causing the prices to rise exponentially.
In China, however, prices are relatively low. That has led many companies to relocate factories to China in order to cut back on production costs.
China has used its monopoly on rare earth metals in the past to bully economic partners. Last October, it was revealed that the government was restricting exports of the metals to both the U.S. and Japan. Many believe the U.S. was targeted because of an investigation launched by the U.S. examining Chinese subsidies in clean energy technology.
By the end of October, the embargo had been lifted, but the point had been made.
Later, Chinese officials suggested that they would significantly lower their export quotas for the rare earth metals. Chinese officials said they planned to cut export quotas to the U.S. by as much as 30 percent this year, but later denied it.
Rare earth prices soar as China stocks up
Manufacturers looking elsewhere for rare earths
Meanwhile, manufacturers in Europe, Japan, and the US are preparing themselves for a lengthy diplomatic process by searching for alternative sources of rare earths. In bilateral talks in the German city of Hanover on Monday and Tuesday of this week, Russia agreed to allow Germany to access its rare earth deposits. Germany, as a high tech producer with no own rare earth sources, is highly dependent on generating access to other sources.
Russian Deputy Prime Minister Viktor Zubkov told reporters that “we are ready to grant an opportunity for German companies to actively participate in the extraction of rare earth metals, which are used in automotive and agricultural machinery production, so that they could build these enterprises in Russia.”
In addition, Australian national newspaper The Australian reports that Germany’s high-tech giant Siemens has signed a letter of intent with Australian miner Lynas to establish a joint magnet plant to supply European wind farms. Neodymium-based rare-earth magnets are needed in wind turbine generators and other energy-efficient drivers.
The joint venture could choose to establish a plant for rare earth extraction in Malaysia, as Lynas is already building a rare earths plant in the country.
Originally posted by zionistsareterrorists
Its their land, they can do what they want. USA needs to learn that they dont own the Earth.