China holds fire on 2011 quota for its rare earth
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Full year export quotas for rare earths in 2011 have not been decided yet, the Ministry of Commerce said Wednesday.
"We will take into account China's rare earth production, domestic and overseas demand, as well as factors such as sustainable development when setting full year export quotas," the ministry said.
Usually two rounds of permits are issued annually.
On Tuesday, the ministry allotted next year's first tranche of export quotas at 14,446 tons to 31 companies. This is about 35 percent below the corresponding volume issued for this year.
For 2011, the ministry included the volume for foreign firms in the first tranche. Previous media reports said the quota was 11 percent lower because they didn't count those for foreign-invested companies.
Foreign firms in the first tranche include two units of French specialty chemicals maker Rhodia. A spokeswoman confirmed the two units are Rhodia's joint ventures in China.
The ministry said it hasn't decided full year quotas and urged concerned parties not to estimate next year's permits based on the first tranche. China cut this year's total quotas by 40 percent from 2009.
The ministry issued 5,978 tons of rare earth quotas to foreign companies in March, adding to the 16,304 tons in 2010 quotas issued to Chinese firms.
China supplies more than 90 percent of the world's rare earths - materials vital in the manufacturing of high-tech products such as cell phones and hybrid cars. News of a cut in quotas sent shares of some foreign rare earth prospectors higher.
"The growth in the Chinese domestic market coupled with a decrease in production of rare earths in China is a likely cause for the tightening of export regulations," said Nicholas Curtis, executive chairman of Australia's Lynas Corp, which owns what it says is the richest known rare earths deposit in the world. Lynas' shares soared more than 10 percent yesterday in Australia.
China has said production and exports of rare earths are based on economic development, plus resource and environment preservation.
