China defends curbs on rare earths

[June 20, 2012]  BEIJING (AP) -- China on Wednesday defended its curbs on rare earths mining and exports amid a World Trade Organization challenge brought by the United States, Europe and Japan.

The government said its controls are meant to protect the environment and preserve dwindling resources and are in line with its WTO free-trade commitments.

China accounts for most of the world's production of rare earths, which are used in mobile phones and other high-tech products.

Global manufacturers were alarmed when China announced it would limit exports while trying to build up its own industry to manufacture products that use rare earths.

"All the measures taken by the government aim at protecting resources and the eco-environment," the government said in a statement issued with a report on its rare earths policies. "They are in line with the international practice and relevant regulations of the WTO."

The United States, the European Union and Japan filed complaints in March with the World Trade Organization charging that China is limiting its export of rare earths, minerals that are vital to the production of high-tech goods.

China accounts for more than 90 percent of global production of 17 rare earth minerals that are used to make goods including hybrid cars, weapons, flat-screen TVs, mobile phones, mercury-vapor lights, and camera lenses.

China has cut export quotas while it tries to build up its own industry to manufacture lightweight magnets and other products made with rare earths.

Senior U.S. administration officials have said Beijing's export restrictions give Chinese companies an advantage by giving them access to more rare earths at a cheaper price, while forcing U.S. companies to manage with a smaller, more costly supply.

China has about 30 percent of global rare earths deposits. The United States, Canada, Australia and other countries also have rare earths but most mining stopped in the 1990s as lower-cost Chinese ores came on the market.

[Associated Press; By JOE McDONALD]

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