China set­ting up rare earth in­dus­try group

The Pak Banker - - I Nternational -

BEI­JING: China is set­ting up a rare earth in­dus­try group that will lead price ne­go­ti­a­tions with for­eign buy­ers, an of­fi­cial said Tues­day, as Bei­jing tight­ens its grip on ex­ports of the pre­cious met­als.

The China Rare Earth In­dus­try As­so­ci­a­tion is ex­pected to be launched in May and has al­ready re­cruited 93 mem­ber com­pa­nies, Wang Caifeng told re­porters on the side­lines of an in­dus­try fo­rum. Wang, a for­mer of­fi­cial in the Min­istry of In­dus­try and In­for­ma­tion Technology, one of the key min­istries over­see­ing the sec­tor, is set­ting up the group. "The as­so­ci­a­tion must re­flect the calls of (Chi­nese) firms and will take up spe­cific tasks in ar­eas such as rare earth ex­ports and for­eign ex­changes," she said, adding the group will lead price talks with over­seas buy­ers.

"We will be on the front­line and will co­op­er­ate with the govern­ment to serve the com­pa­nies." China pro­duces more than 95 per­cent of the world's rare earths, which are crit­i­cal to man­u­fac­tur­ing 21st-cen­tury goods from iPods to low-emis- sion cars to wind tur­bines.

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

Ja­panese in­dus­try sources said China tem­po­rar­ily cut off ex­ports ear­lier this year dur­ing a ter­ri­to­rial row be­tween Asia's two largest economies.

While China has de­nied halt­ing ex­ports, the United States last week called for Bei­jing not to use con­trols over the met­als as a "weapon" to serve po­lit­i­cal in­ter­ests.

Chi­nese Com­merce Min­is­ter Chen Dem­ing, on a visit to Washington ear­lier this month, de­nied any po­lit­i­cal mo­ti­va­tion over rare earth ex­ports.

Wang said she be­lieved the ex­port quota for 2011 would not be re­duced sig­nif­i­cantly from this year and would still "be suf­fi­cient to meet do­mes­tic and in­ter­na­tional de­mand".

The quota this year was 30,300 tonnes, down 39 per­cent from 2009, ac­cord­ing to govern­ment fig­ures. -Afp

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