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China defends rare earth hoarding
Peter Cai
June 20, 2012 - 4:38PM
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China has defended its export control of strategic raw material rare earths on environmental grounds in a newly released white paper today and urged other countries not to ‘‘politicise’’ the issue.

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The paper says the government policy is meant to protect the fragile environment and the country’s control of the industry is consistent with its WTO obligations. The United States, the European Union and Japan filed complaints in March with the World Trade Organization challenging Beijing’s policy of curbing the export of rare earths.

The vice-minister of industry and information technology Su Bao told a gathering of local and international reporters in Beijing that the Chinese government ‘‘ is absolutely not willing to sacrifice the environment in order to develop the rare earths industry.’’

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He said the government would invest 4 billion yuan or $600 million to clean up environmental mess associated with the rare earths mining and it was determined to close down polluting producers and phased out out-of-date technology used in the extraction of the raw materials.

The sharp spike in the price of rare earths was also defended and the accusation of the government manipulation of price was also denied. Mr Su said the price of rare earths only increased 2.5 times between 2000 and 2010 and by comparison, the prices of gold, copper and iron ore had all increased by more than four times during the same period.

‘‘Rare earths is such a precious resources and have value similar to that of gold. And yet we sold them at prices of cabbages and carrots in the past,’’ Mr Su said.

A senior official from the Ministry of Industry and Information Technology at the press conference said that more than 40 per cent of export quota of rare earths from the last year was not taken up by exporters and this reflected that there was adequate supply of the material on the international market.



Read more: http://www.theage.com.au/business/mining-and-resources/china-defends-rare-earth-hoarding-20120620-20nxv.html#ixzz1yJkSQaw6