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China says its rare earths supply may be inadequate

China says its rare earths supply may be inadequate
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First Published: Thu, Sep 03 2009. 09 57 PM IST

Depleting reserves: A file photo of the Lingxin Er mine in Ningxia province of China. The country contains about half of the world’s rare earths reserves and produces more than 90% of global output. L
Depleting reserves: A file photo of the Lingxin Er mine in Ningxia province of China. The country contains about half of the world’s rare earths reserves and produces more than 90% of global output. L
Updated: Thu, Sep 03 2009. 09 57 PM IST
Beijing: China said supplies of two minerals used in hybrid cars and television sets may be inadequate for its needs, amid rising concerns that exports from the largest rare-earths producer may fall.
China has been tightening control of exports of rare earths, a range of 17 chemical elements used to make parts in Toyota Motor Corp.’s Prius and Apple Inc.’s iPods. Restrictions could heighten tensions with the US and Europe, which in June filed a trade complaint against China for metal export limits.
Depleting reserves: A file photo of the Lingxin Er mine in Ningxia province of China. The country contains about half of the world’s rare earths reserves and produces more than 90% of global output. Lucas Schifres / Bloomberg.
“China itself may not have enough supply of dysprosium and terbium,” Wang Caifeng, deputy director general of the raw materials department at the ministry of industry and technology, said on Thursday. The government won’t ban shipments of rare earths in keeping with its export policy, she said, refusing to comment on possible further limits.
“The rest of the world has become a little concerned about possible export bans from China,” said Judith Chegwidden, managing director at London-based Roskill Information Services Ltd, an industry research group. Dysprosium is increasingly used in permanent magnet motors in hybrid cars such as Prius or wind turbines. Demand is growing fast.
China contains about half of the world’s rare earths reserves and produces more than 90% of global output. The government started to curb production and exports in 2006, after prices dropped to half of the level in 1990. Exports fell 35% to 34,600 tonnes in 2008 from 53,300 tonnes in 2006, according to Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co. Ltd, which owns the largest rare-earths mine.
“Demand is growing in areas of military defence, missiles, electronic information and green energy,” the ministry’s Wang said at a conference in Beijing. “Modern society can’t do without cellphones and televisions.”
China needs 70,000 tonnes of rare earth a year, she said.
Terbium is a silvery-white metal used to make alloys and phosphorus used in lamps and TV tubes. Other rare earths include neodymium, which is used in mini hard drives in laptops and headphones in Apple’s iPod. Yttrium and europium are used to generate red on colour TV and computer monitor screens.
Mining for rare earths has led to serious pollution, Wang said. To mine a tonne of the material could lead to 2,000 tonnes of dirt and waste, she said.
China cut 2009 output quotas of rare earths by 8.1% from a year ago to 119,500 tonnes, the ministry said on May 18.
“China is also encouraging producers of minor metals to export processed products rather than raw materials to increase the value of shipments,” Liang Shuhe, deputy head of foreign trade at the ministry of commerce, said on Thursday.
Minor metals include antimony, magnesium, zirconium, mercury and bismuth, according to the Minor Metals Trade Association. China’s Jinduicheng Molybdenum Co. Ltd is Asia’s largest producer of molybdenum, used to harden steel.
The majority of China’s minor metals exports remain in the raw material form, Liang said. “We encourage exports of high value-adding, high-end products instead of the raw materials.”
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First Published: Thu, Sep 03 2009. 09 57 PM IST