Shanghai: China cut its rare earth export quotas by 11 per cent in the first round of permits for 2011, threatening to worsen a global shortage of the minerals needed for smartphones, hybrid cars and guided missiles.
The government allotted 14,446 metric tonnes of rare earth exports split among 31 companies, the Ministry of Commerce said in a statement.
That compares with the first round this year of 16,304 tonnes and the second round of 7,976 tonnes, according to previous ministry statements.
The government usually issues two rounds of export quotas every year.
China, which accounts for more than 90 per cent of world supplies, slashed export quotas by 72 per cent in the second half of this year, sparking a surge in prices.
Japan, the biggest user, has sought alternate supplies with companies including Hitachi Metals, and Mitsubishi Materials Corporation seeking joint ventures at home and abroad to secure the minerals.
"This is in line with government officials' comments that we need to protect the environment and resources," said Chen Jiazuo, an analyst at metals researcher Beijing Antaike Information Development Company.
"Controlling domestic production capacity, output and exports will continue to be the theme."
Last year, China's government clamped down on its rare earth industry, setting production quotas to bolster prices. China said in July this year it would reduce export quotas in the second half to supply its own electronics industry and overhaul a mining sector blamed for causing widespread environmental damage.
Looking abroad
"As China has advanced technologies in rare earth production, companies can seek cooperation to develop mines abroad," Antaike's Chen said.
The Asian country will also raise export taxes for some rare earth elements to 25 per cent next year, the Ministry of Finance said this month.
The move is an increase from the 15 per cent temporary export tax on neodymium, used in batteries for hybrid cars including Toyota Motor Corporation's Prius. The latest move to curb exports may further exacerbate tensions with the US, which last week said it may file a World Trade Organisation complaint over restraints on supplies of the minerals.
Electronics
Rare earths are 17 chemically similar elements including neodymium, cerium and lanthanum that are used to manufacture electronics.
Molycorp Incorporated, owner of the world's largest non-Chinese rare-earth metals deposit, this month agreed to joint ventures with Japan's Hitachi Metals to produce alloys and magnets in the US. Hitachi Metals uses 600 tonnes of the metals each year.
