SHANGHAI—Chinese statistics published Wednesday showed a 9.3% slide in the country’s rare-earth metal exports last year, but also showed that overseas sales were a third higher than stipulated in the government’s own quota allocation.
China’s export of rare earth ore, metals and compounds slipped to 39,813 metric tons in 2010, according to figures published Wednesday by the quasi-official China Customs Statistics Information Centre in Hong Kong. The figures underscored Beijing’s tight grip on the specialized metals but also showed how the trade was sustained at levels well above a Commerce Ministry quota that was designed to slash exports by 40% last year to 30,258 tons.
Pockets of global industry closely monitor China’s policy on rare earths because over 95% of world supply emerges from the nation’s mines and processing centers. The 17 chemically similar elements have unique properties that have paved the way for miniaturized electronics such as the iPhone and specialized magnets used in wind turbines, as well as advances in petroleum refining and glassmaking.
Reflecting how fears of tightening supply sent global rare-earth prices soaring in 2010, China’s exports of the elements tripled in value, Wednesday’s data show. Just the same, even at the higher levels, the overseas market was worth only $939.72 million in 2010, about what China made exporting leather gloves.
China’s quotas, which have been tightened several years in a row but especially so in 2010, have discomforted governments fearful that Beijing could use industry dominance as a trade weapon. A U.S. Department of Energy study recently warned of short-term supply disruptions for elements such as dysprosium and neodymium needed to make wind turbines and electric cars. The Washington trade group Alliance for American Manufacturing is among those pressing U.S. President Barack Obama to seek supply assurances from Chinese President Hu Jintao in their meetings this week.
But the fears have also sparked a rush of investment into rare-earth miners such as Colorado-based Molycorp Inc. that are seeking to challenge China’s dominance. Toyota Motor Corp., a user of rare earths for its Prius vehicles, caused a stir last week when it revealed plans to develop an efficient engine that doesn’t need the elements.
Beijing says its quotas, which are slated to reduce exports 35% for the first half of this year, are part of a strategy to restructure the heavily polluting rare earth industry, to conserve its reserves of about a third of the world total and combat widespread smuggling in the elements.
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