China urges nations to accept rare earths stance

Economies that have come to depend on China for rare earths metals should accept that Beijing has real environmental concerns that make curtailing exports necessary, the Chinese Commerce Minister Chen Deming said on Monday.

China produces about 97 percent of the global supply of rare earth minerals used in smartphones, electric car motors and high-tech industrial equipment. Beijing cut export quotas by 40 percent last year, alarming buyers and trading partners.

China has again cut export quotas for the first half of 2011 by 35 percent from the first half of last year, and the United States has said it could complain to the World Trade Organisation about the restrictions.

But Chen said the quotas were for legitimate environmental reasons. He said he had seen the ravages from using acid to leach the minerals from the earth.

"The Chinese government faces immense environmental pressures, and I hope everyone can understand the decision to impose parallel reductions and limits on mining, processing, domestic applications and exports," Chen told a news conference held as part of China's annual parliamentary session.

Chen said that his government was willing to work with Japan, the main consumer of rare earths used in electronics products, to find substitutes for the metals, which he said were increasingly scarce.

"We have to find ways of re-using rare metals and also substitute materials for them, and we're willing to engage in joint research on that," he said.

Japan said late in February that it planned to cut its rare earth consumption by a third within a few years to reduce its reliance on China's supply.

For its part, China last month announced a shake-up of its rare earths industry, vowing "reasonable" quotas on mining and exports to bring order to the small but strategic sector.

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

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