China tries to calm unease over rare earths curbs

BEIJING — A Chinese official tried to calm unease about curbs onexports of rare earths used in clean energy products andsuperconductors, saying Thursday that sales will continue but must belimited to reduce damage to China's environment.

China producesnearly all the rare earths used in batteries for hybrid cars, mobilephones, superconductors, lightweight magnets and other high-techproducts. Reports of a plan to reduce exports sparked concern about theimpact on industry abroad.

Beijing will encourage sales offinished rare earths products but will limit exports of semi-finishedgoods, said Wang Caifeng, deputy director-general of the materialsdepartment of the Ministry of Industry and Information Technology.

Exports of raw ores already is banned, and said that will continue, Wang said at an industry conference.

Wangrefused to confirm Chinese news reports that this year's exports willbe cut to about 8 percent below 2008 levels and future exports will becapped at similar levels. She said a plan will be be issued later thisyear.

"China, as a responsible big country, will not go back and will not take the road of closing the door," Wang said.

Butshe said China has to limit output to protect its environment. She saidproduction of one ton of rare earths produces 2,000 tons of minetailings.

"China has made a big sacrifices for rare earthsextraction," said Wang, who said she has spent her whole 30-year careeroverseeing the industry. "It has damaged our environmental resources."

Wangspoke at the Minor Metals & Rare Earths 2009 conference, cohostedby China Chamber of Commerce of Metals Minerals & ChemicalsImporters & Exporters and Metal Pages Ltd., a London-based metalstrading and information company.

China accounts for 95 percent ofglobal production and about 60 percent of consumption of rare earths,which include such metals as dysprosium, terbium, thulium, lutetium andyttrium, according to the U.S. Geological Survey.

The UnitedStates supplied nearly all its rare earths needs from its own mines asrecently as 1990, according to the USGS. But it says output plungedafter the market was flooded with low-cost ore from China, which haslower labor costs and less-stringent environmental controls.

China wants to develop its industries to process rare earths and create products from them, Wang said.

Chinabanned new wholly foreign-owned processing ventures in 2002 but someFrench and Japanese companies set up operations before that, Wang said.She said new foreign investors will be required to work throughjoint-ventures with Chinese partners.

Last year, China exported10,000 tons of rare earths magnets worth $400 million and 34,600 tonsof other rare earths products worth $500 million, according to Wang.

Chinaused 70,000 tons of rare earths in 2008 out of reported total globalconsumption of 130,000 tons, Wang said. She said she believed globalconsumption was higher than indicated by the official statistics.

China'sdemand for rare earths has surged as manufacturers shifted productionof mobile phones, computers and other products to Chinese factories.

TheUnited States and European Union have objected to similar Chinesecontrols on exports of other industrial materials. They filed a WorldTrade Organization complaint in June accusing Beijing of improperlyfavoring its industries by limiting exports of nine materials includingbauxite and coke in which it is a major supplier.

Associated Press researcher Bonnie Cao contributed to this article.