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Tuesday, December 27, 2011

China cuts 2012 rare earth export quota by 27pc

CHINA unveiled an initial cut of 27 per cent in its quota for rare-earth exports for next year, but said its full-year 2012 limits for the key materials used to make everything from defence systems to turbines to iPhones would likely be unchanged amid weakened demand.

China controls about 95 per cent of global rare-earth supply and has been reducing its export quotas to secure greater control over prices, leading to a surge in prices over the past two years. Demand has eased significantly this year in the face of higher prices as mining companies outside China look to tap new sources and companies find ways to reduce their use of the metals.

The Commerce Ministry said Tuesday exporters will be allowed to sell 10,546 tons of rare earth metals in the first half of 2012. That amount will be split among 11 companies.

The ministry said Chinese exports of rare earths totaled 14,750 tons for the first 11 months of 2011. It gave no figure for the full-year in 2011.

China's export restrictions have strained relations with the United States, the European Union, Japan and governments that have called on Beijing to remove its curbs and make its intentions clear.

Despite production and export restraints, rare earth metals prices have tumbled as U.S. and European economic troubles stifled demand.

Rare earths are 17 chemical elements including cerium, dysprosium and lanthanum that are used to manufacture flat-screen televisions, batteries for electric cars and wind turbines. They are also used in some high-tech weapons systems.

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