Report: China May Tighten Controls on Rare Earths

081915 purse snatch video
Miami Police

China may tighten environmental controls on rare earth mining, further raising the cost of metals vital to global high-tech industry, a state news agency said Sunday.

The report will add to international concern over the supply of the minerals needed to produce items such as cell phones, missiles and solar energy panels. China now produces 97 percent of the world's supply and has recently been accused of blocking rare earth exports to Japan.

The official Xinhua News Agency cited industry insiders as saying Chinese authorities are considering tightening pollution standards for rare earth miners, which will increase the cost of production and may raise the price of rare earth exports.

Yang Wanxi, a government adviser involved in the drafting of new regulations on rare earths, was cited as saying the standards were aimed at forcing producers to upgrade production techniques. Experts have suggested that the government consider eliminating small producers with annual production capacity of less than 8,000 tons of mixed rare earth products, Yang said.

Most of the industrialized world, including the United States, Japan and Europe, have largely abandoned their production of rare earths in favor of cheaper Chinese exports, but there are now mounting calls for nations to work to diversify supply.

Japanese companies say that China has blocked exports of rare earths to them since September, amid a dispute between the two governments over disputed islands in the East China Sea.

Chinese officials last week assured U.S. Secretary of State Hillary Rodham Clinton that China would remain a reliable supplier. But Clinton has made clear that countries like Australia and the United States need to act to protect the supply.

Copyright CNBC
Contact Us