China wise to guard its rare earth wealth

October 18th, 2010 | People's Daily

According to Japanese media reports, Japan’s ambassador to China recently met with ambassadors from the United States, the United Kingdom, Germany, France and South Korea in an attempt to align with them to pressure China to loosen restrictions over rare earth exports. A spokesperson of China’s Ministry of Commerce said last Friday that China’s regulatory measures on the exploration, production and export of rare earths are in line with international practice and the WTO rules. China will not use export of rare earths as a way to block others.

Chinese Premier Wen Jiabao said it is necessary for China to exercise control and regulation over rare earth minerals during his visit to Europe, but it will also consider the world’s need. China will not use rare earth resources as a bargaining chip. Since 2010, China’s Ministry of Commerce set the rare earth export quota at 24,281 tons, retaining China’s position as the greatest exporter of rare earth materials.

As scarce and nonrenewable resources, rare earth elements are indispensable material needed by sophisticated industries and national defense industry. China now satisfies 90 percent of the world’s need with 30 percent of the world’s total reserves, which is not sustainable in the long term. More importantly, China exported rare earth materials at low prices for a long time due to some problems in the industry.

The environmental problems inflicted by the exploration and utilization at the early stage make regulating the industry an urgent task. In recent years, the Chinese government has strengthened control over the production and export of rare earth materials in an attempt to sustain the industry. No one is entitled to criticize China over this because this is an affair absolutely within China’s sovereignty.

Rare earth materials are not only economic resources but also strategic resources. This is clear to all the countries. According to a report titled “Rare Earth Elements: The Global Supply Chain,” submitted to the U.S. Congress by Mark Humphries, rare earth reserves of China, United States, Russia, Australia accounts for 36 percent, 13 percent, 19 percent and 5.5 percent of the world’s total, respectively. But China’s rare earths output is 97 percent of the world’s total versus zero by another three countries!

These countries “hide” their own reserves and use low-price rare earth materials imported from China. The purpose is self-evident. Not to mention many countries purchase rare earth elements to stockpile instead of immediate use.

Japan, as a principal consumer of rare earth elements, has almost no rare earth deposits. Japan purchased and stored a large amount of high-quality rare earth materials from China in the past decade, which analysts believe is enough to satisfy its needs for dozens of years. Recently, Japanese trade minister Akihiro Ohata said China’s rare earth exports to Japan have not been restored to the normal level. If what he means by normal level is the large amount of exports at a low price, then the normal level will never be seen again.

Every country has the right to use its resources rationally. Having supplied a large amount of rare earth materials to the world at low prices, now it is time for China to consider about the development of its rare earth industry. China recently implemented necessary management and restriction over rare earth industry in accordance with its laws and regulations, the core of which is to protect environment and achieve sustained development. This is not only responsible for China’s development, but also responsible for the world’s.

By Zhang Danhua

Category: Featured Articles, Mining