China raises fresh in­ter­na­tional trade con­cerns

The Pak Banker - - I Nternational -

SYD­NEY: China has raised fresh in­ter­na­tional trade con­cerns af­ter slash­ing ex­port quo­tas on rare earths min­er­als, risk­ing ac­tion from the United States at the World Trade Or­ga­ni­za­tion.

China, which pro­duces about 97 per­cent of the global sup­ply of rare earth min­er­als, cut its ex­port quo­tas by 35 per­cent for the first half of 2011 ver­sus a year ago, say­ing it wanted to pre­serve am­ple re­serves, but warned against bas­ing its to­tal 2011 ex­port quota on the first half fig­ures.

The U.S. Trade Rep­re­sen­ta­tive's of­fice was "very concerned" about China's ex­port re­straints on rare earths and had raised its con­cerns with China, a spokes­woman said on Tues­day.

U.S. mak­ers of high-tech prod­ucts such as Ap­ple Inc's iPads, along with Ja­panese com­pa­nies have been scram­bling to se­cure re­li­able sup­plies of the min­er­als out­side of China as Bei­jing steadily re­duces ex­port al­lo­ca­tions.

Ja­pan's Sony Corp said China's move to cut ex­port quo­tas was a hin­drance to free trade and that it would work to re­duce its re­liance on Chi­nese sup­plies. "At this point in time there is no di­rect im­pact on our com­pany. But fur­ther re­stric­tions could lead to a short­age of sup­ply or rise in costs for re­lated parts and ma­te­ri­als," Sony said in an email state­ment in re­sponse to ques­tions from Reuters. "We will watch the sit­u­a­tion care­fully."

Sony, maker of Bravia brand flat TVs, Vaio PCs and the PlayS­ta­tion 3 videogame con­sole, will look for ways to cut its use of rare earths, in­clud­ing de­vel­op­ing al­ter­na­tive ma­te­ri­als, Sony spokes- woman Ayano Iguchi said.

China's move, how­ever, came as a shot in the arm for some com­pa­nies.

Ly­nas Corp, which owns the world's rich­est known nonChi­nese de­posit of rare earths, jumped over 10 per­cent even though it will be at least a year be­fore it is ca­pa­ble of min­ing any ma­te­rial from a new lode in Aus­tralia.

Other rare earths com­pa­nies, in­clud­ing China Rare Earth Hold­ing Ltd, Ara­fura Re­sources, Alkane Re­sources and Green­land Min­er­als and En­ergy Ltd also gained be­tween 8 per­cent 10 per­cent.

"Ex­port quo­tas con­tinue to be a tool for the Chi­nese govern­ment to limit the ex­port of China's strate­gic re­source,"

Ly­nas Ex­ec­u­tive Chair­man Nick Cur­tis said in a state­ment.

"The growth in the Chi­nese do­mes­tic mar­ket cou- pled with a de­crease in pro­duc­tion of rare earths in China is a likely cause for the tight­en­ing of ex­port reg­u­la­tions," said Cur­tis, whose com­pany is aim­ing to start pro­duc­tion in about a year and has al­ready forged sup­ply con­tracts with Ja­panese traders. World de­mand for rare earths at present is about 110,000 tonnes a year, with China ac­count­ing for about 75 per­cent of to­tal de­mand with the re­main­der split be­tween Ja­pan, the United States and Europe, in de­scend­ing or­der.

De­mand for rare earths is set to more than dou­ble to 250,000 tonnes by 2015, ac­cord­ing to in­dus­try es­ti­mates.

"Concerned par­ties should not es­ti­mate full-year quo­tas for rare earth min­er­als just by look­ing at the first set of quo­tas," China's Min­istry of Com­merce said. -Ap

DUR­BAN: In­dia's Za­heer Khan, right, cel­e­brates with team­mates af­ter win­ning the sec­ond test match against South Africa at the Kingsmead sta­dium in Dur­ban, South Africa. In­dia won by 87 runs. -Ap

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