Beijing has again sought to refute rumors about its plans to exploit its stranglehold on the global supply of rare-earth metals. It also denies any intention to slash the mining of the 17 chemically similar elements out of its ore deposits as well as their exports to major overseas markets.
The Chinese Ministry of Industry and Information Technology has pledged that the country’s planned mining and output of rare-earth minerals will continue to rise. It further states that global manufacturers of magnets, catalysts, alloys and electronic devices can rest assured that there would never be any policy-driven curb on supplies.
Beijing has taken a reassuring tone after Reuters speculated last week that the country had capped its rare-earth minerals production to 45,000 tons in the second half of this year, citing data from Dutch market research firm Adamas Intelligence.
Reuters noted that the reduction was meant to ensure a fat markup for Chinese miners and exporters.
In response, Xinhua quoted the Industry and Information Technology Ministry as saying this week that China would raise rare-earth mining quotas for 2018 from 105,000 tons to as much as 120,000 tons and the melting quota from 100,000 tons to 115,000 tons.
That said, the Xinhua report gave scant details about the remaining quotas for the rest of the year. And even where there are no restrictions on exports, government-issued permits are required in order to be able to sell such strategic metals overseas.
Rare-earth elements are hailed as the primal, base materials for virtually everything electronic in modern-day manufacturing. The products dependent upon them range from microchips, hard disk drives, smartphones and other portable gadgets to LCDs (liquid crystal displays) and plasma screens. They are also indispensable in the making of key alloys as well as the manufacturing of fuel cells and nickel metal hydride batteries.
In the mid-1990s, China consolidated its control over the global rare-earth market and before long the last US mining and processing plant for rare earths closed in 2002 because it was unprofitable. Making use of its virtual monopoly, China began imposing export quotas in 2006, and during a diplomatic spat over the Senkaku Islands in 2010, China began limiting exports to Japan, a major user of rare earths for high-tech goods.
As early as 2012, the US, the European Union and Japan confronted China at the World Trade Organization about rare-earth export and production restrictions, which were dismissed by China, citing environmental concerns arising from over-exploitation.
Nonetheless, a monumental discovery of a “huge rare-earth trove” under the seabed of the Japanese economic zone off Minamitori Island, a remote Pacific island some 2,000 kilometers southeast of Tokyo, may have the potential to turn Japan, a global dynamo in electronic research and manufacturing, from an importer of the precious metals to a self-sufficient producer capable of quenching the global demand as well.