China raises fresh international trade concerns
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