China wants to keep rare mineral export restrictions

China said on Wednesday that it would appeal against a World Trade Organisation ruling that it illegally restricted exports of certain rare and speciality metals and minerals including bauxite, fluorspar, magnesium, manganese, silicon metal, silicon carbide, yellow phosphorus and zinc.

The United States, European Union and Mexico argued that the minerals are key inputs for numerous industries and any cut in supplies could lead to sharp spikes in world prices. The complainants fear a similar situation to rare earths where the price of certain elements have tripled thanks to export cuts and China’s virtual monopoly on production.

The Institute of International Trade reports China has claimed that its measures are in harmony with the objective of sustainable development promoted by the WTO and enhance the healthy development of the resource industry.

Similar exports restriction by Beijing of rare earths – the 17 elements critical to many high-tech products from iPods and wind turbines to hybrid cars and military hardware – has lead to runaway prices and security concerns outside China. reported in July when news broke that China was raising REE export quotas for the second half of the year it was greeted with some surprise and a measure of relief by high-tech manufacturers, but as the implications of the announcement on future pricing of the 17 elements begin to sink in some analysts are pointing out that rather than easing the pressure on manufacturers, China’s move was aimed at cutting off at the knees development of mining projects outside its borders.

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