Out­put quo­tas rise 10% for rare earth firms

China Daily (Canada) - - BUSINESS - ByWANG ZHUOQIONG wangzhuo­qiong@chi­nadaily.com.cn

The govern­ment will in­crease ex­plo­ration and pro­duc­tion quo­tas for rare earth com­pa­nies by 10 per­cent this year to bring out­put in line with the sec­tor’s ca­pac­ity, a se­nior of­fi­cial said.

Huang Libin, an of­fi­cial at theMin­istry of In­dus­try and In­for­ma­tion Tech­nol­ogy, gave the fig­ure dur­ing Thurs­day’s half-year brief­ing.

The in­crease is also a re­sponse to rapid in­dus­trial devel­op­ment in the coun­try, in­clud­ing rare earth-based new ma­te­ri­als and en­vi­ron­men­tal pro­tec­tion and con­ser­va­tion prod­ucts, which are spurring longert­erm de­mand for rare earths, he said.

Rare earths are a group of min­er­als that have many uses in high-tech­nol­ogy sec­tors such as de­fense and re­new­able en­ergy. China sup­plies 90 per­cent of the global de­mand.

Con­sol­i­da­tion and re­form in the do­mes­tic rare earth in­dus­try over the past three years have led to the clo­sure of un­li­censed pro­duc­ers and those who were vi­o­lat­ing reg­u­la­tions, said the of­fi­cial.

It also drove smaller re­fin­ers into merg­ers with large ones such as In­nerMon­go­lia Bao­tou Steel Rare-EarthHi-Tech Co.

Giv­ing more quo­tas to the large com­pa­nies will al­low them to re­place those that have closed.

Huang said that quo­tas might grow fur­ther as reg­u­la­tion of the in­dus­try im­proves amid grow­ing mar­ket de­mand. But he said the in­dus­try is still too large.

Na­tion­wide, the to­tal quota for pro­duc­tion is 105,000 met­ric tons this year. BaoS­teel, the coun­try’s largest pro­ducer, got a pro­duc­tion quota of 59,500 met­ric tons for light rare earths, an in­crease of nearly 20 per­cent from last year.

Du Shuaib­ing, an an­a­lyst at nat­u­ral re­sources con­sul­tancy BaiChuan In­for­ma­tion, said that the quota in­crease is mostly in­tended to al­low sur­viv­ing com­pa­nies to use their pro­duc­tion ca­pac­ity.

The World Trade Or­ga­ni­za­tion in late March ruled that China had acted in­con­sis­tently with­WTO rules with re­gard to ex­port mea­sures im­posed on rare earths.

Du said China’s ex­port quota sys­tem would re­main in place un­til 2015. In the past fewyears, glob­alde­mand­for rare earth­swas rel­a­tively low, and many quota al­lo­ca­tions were not used.

Ear­lier this month, the Min­istry of Com­merce an­nounced the sec­ond batch of rare earth ex­port quo­tas for 2014. So far, it has not shown any signs of ex­pand­ing the quo­tas this year.

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