China sets up rare earths industry group

Apr 09, 2012 By ELAINE KURTENBACH , AP Business Writer

(AP) -- China has set up a rare earths industry association to fend off trade complaints and help regulate the sector that is critical to global high-tech manufacturing.

The Ministry of and Information Technology announced the group's founding Sunday, saying it would coordinate mining, smelting and processing and seek to form a "reasonable price mechanism" for the materials, used in many high-tech applications.

It said the group would help coordinate China's response to rare earth trade disputes such as a complaint alleging unfair market manipulation that was filed last month by the U.S., EU and Japan at the .

Rare earths are used to make goods including , weapons, flat-screen TVs, mobile phones, mercury-vapor lights, and camera lenses. China has about a third of the world's rare earth reserves but supplies about 90 percent of what is consumed.

Beijing has imposed limits on rare earths production and exports, citing a need to impose order on an unruly domestic market and to reduce , raising protests from Japan, the U.S. and other countries that rely on supplies from China.

A key aim is to rein in wide swings in prices, said Heng Kun, a rare earth analyst at Essence Securities, based in Beijing.

"The whole industry should just avoid price volatility. It does harm to all," he said.

Officials have denied accusations Beijing is using its quasi monopoly on the resources as a diplomatic bargaining chip, or to manipulate prices.

"Many countries in the world have rare earth reserves, you cannot rely on China alone to provide all the supplies," the official quoted the newly appointed head of the industry group, Gan Yong, as saying.

The rare earths association includes 155 companies, including state-owned giants like Aluminum Corp. of China and China Minmetals Corp., the ministry said in a statement on its website.

Typically for China, central aimed at curbing unlicensed mining and processing of rare earths had often gone unheeded by local level officials focused on maximizing tax revenues and creating jobs.

The new group could help regulators indirectly impose more "self-discipline" on the industry, Heng said.

The MIIT said the new industry group aims to consolidate smaller companies into large corporations, promote the industry's restructuring and "strictly enforce the mandatory production plan."

The newspaper Business News reported Monday that only 56 of more than 350 producers had met environmental standards. It cited officials in Jiangxi province, where much of the mining is concentrated, as saying that the estimated costs for environmental repair, at 38 billion yuan ($6 billion), were much higher than profits earned over many years.

Explore further: Amazon launches 3D printing store

5 /5 (1 vote)
add to favorites email to friend print save as pdf

Related Stories

China plans restructure of rare earths industry

Jun 08, 2011

(AP) -- China is giving its biggest, state-owned rare earths miner and producer a monopoly for the northern part of the country in reforms aimed at bringing the strategically important sector that's crucial to advanced manufacturing ...

Japan, US, EU discuss rare earth supply security

Mar 28, 2012

(AP) -- Officials from the United States, the European Union and Japan are pledging to work closer together on ways to ensure secure supplies of strategically vital rare earths and other critical materials.

China rare earths supplier suspends production

Oct 20, 2011

(AP) -- China's biggest producer of rare earths is suspending production for one month in hopes of boosting slumping prices of the exotic minerals used in mobile phones and other high-tech products.

China says rare earths not a 'bargaining tool'

Oct 28, 2010

(AP) -- China said Thursday it will not use exports of rare earths, exotic minerals required by high-tech industry, as a diplomatic "bargaining tool" while Washington pressed Beijing to clarify its policy following its de ...

China to raise rare earths production this year

Mar 31, 2011

(AP) -- China said Thursday it will increase this year's production quota for rare earths but gave no sign it might reverse plans to cut exports of the exotic metals needed by high-tech industry.

Japan, US, and EU to meet on rare earths

Mar 21, 2012

Japan said Wednesday it will host the European Union and United States at a meeting on developing alternatives for rare earths as Chinese controls on the key minerals raise fears of a supply squeeze.

Recommended for you

Amazon launches 3D printing store

5 hours ago

Amazon announced Monday the launch of an online store for 3D printed items to allow consumers to customize and personalize items like earrings, pendants, dolls and other objects.

Samsung delays Tizen smartphone sales launch

10 hours ago

Samsung Electronics said Monday it would postpone the roll-out of its new smartphone based on Tizen, a home-grown operating system aimed at breaking away from Google's Android system.

Chinese portal Sohu reports $45 million loss

13 hours ago

(AP)—Sohu.com Inc., operator of a popular Chinese Internet portal, said Monday it lost $45 million in the latest quarter while revenue rose 18 percent to $400 million.

User comments : 3

Adjust slider to filter visible comments by rank

Display comments: newest first

Tennex
not rated yet Apr 09, 2012
This is where all dreams about green energy and green cars end...
bredmond
not rated yet Apr 09, 2012
Rare earths are used to make goods including hybrid cars, weapons, flat-screen TVs, mobile phones, mercury-vapor lights, and camera lenses.


yeah, and milk, toothpaste and pet food can also have a bit of rare earths just for flavor. j/k
Jimee
not rated yet Apr 12, 2012
So we allow rare earth production in the US to die, because it's bad to "pick and choose" winners in the market? Why can't we go back to producing our own rare earth metals? Until the Chinese forced the price so low, we had a good industry.