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Posted on January 9, 2015 by  & 

China ends rare earth export limits

According to Shanghai Daily, China has abolished export quotas for rare earth metals as the government complied with a World Trade Organization ruling in March last year.
 
The change was included in the Ministry of Commerce's trade guidelines for 2015. Under the new guidelines, rare earths will require an export license but the amount that can be sold abroad will no longer be covered by a quota.
 
China imposed quotas in 2010 to compensate for the huge environmental costs of production. They led to efforts to reopen or develop new mines in the US and elsewhere, and by Japan and some other countries to recycle rare earths.
 
Importers in Japan, Europe and the US then complained that the quota system was against international trade rules by discriminating overseas buyers. The three countries petitioned the WTO dispute settlement mechanism in June 2012 about China's export restrictions.
 
China has about 30 percent of global deposits of rare earths but accounts for more than 90 percent of production.
 
Rare earths, a group of 17 metals used in high technology sectors such as defense and renewable energy, have been a controversial resource in China as the process of extracting the metals from the earth is extremely harmful to the environment.
 
Meanwhile illegal exploration and tax evasion have also severely damaged the sector.
 
The Chinese government has, in recent years, cracked down on unauthorized mines and smuggling.
 
 
China also tightened control over its rare earth industry by pushing firms to merge into state-owned groups and forcing smaller producers to close.
 
The quota system were especially sensitive at a time following the 2008 financial crisis when governments were trying to boost exports to reduce unemployment. The US and Europe want to increase sales of high-tech goods that include products made with rare earths.
 
China exported 22,493 tons of rare earths in 2013 and 22,224 tons in the first 10 months of 2014, customs data showed.
 
The market price of rare earths spiked in 2011 amid fears of shortages. Prices have declined since then but are above 2010 levels.
 
Source: Shanghai Daily
Top image: Wikipedia
 
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