China Tightens Controls On Rare Earths Production

China's trading partners say export quotas and taxes push up rare earths prices abroad, giving buyers in China an unfair advantage.

One mineral, terbium oxide, costs $2,000 per kilogram on global markets this week, more than double its $863.47 price in China, according to Lynas Corp., an Australian miner. Neodymium oxide cost $105 per kilogram on global markets and $67.50 in China.

The dispute reflects the clash between Beijing's free-trade pledges and its ambitions to transform China from a low-wage factory into a creator of profitable technology.

Rare earths are 17 minerals used to make goods including hybrid cars, weapons, flat-screen TVs, mobile phones, mercury-vapor lights and camera lenses.

China reported total exports last year of 18,600 tons, just 60 percent of the 30,000-ton quota, due in part to slack global demand. The government cut the export quota for the first half of this year by 27 percent from a year earlier to 10,546 tons.

The United States, Canada, Australia and other countries also have rare earths but most mining stopped in the 1990s as lower-cost Chinese ores came on the market.

Beijing's decision to limit exports has prompted foreign producers to announce plans to reopen or develop mines in California, Canada, India, Russia and elsewhere.

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