Thursday, September 20, 2012

China Cuts Rare Earths Mining Permits

China has about 30 percent of the world
supplies of rare earths, but accounts for
more than 90 percent of production
BEIJING (ASSOCIATE PRESS)-In a new move to tighten control over rare earths, China's Ministry of Land and Resources has decided to cut the number of mining permits by 40 percent from 113 to 67. This announcement comes amid tensions between Beijing and Tokyo over control of a group of uninhabited islands in the East China Sea. The last time tensions over the islands flared in 2010, Beijing temporarily suspended rare earths shipments to Japanese buyers.There is no indication whether Japan might be affected by the latest change. The restrictions are especially sensitive at a time when governments are trying to boost exports to reduce unemployment. China also limited the number of companies permitted to export rare earths.

Beijing has alarmed global manufactures when it restricted production exports, while it was trying to build up its own processing industry to capture profits that flow to U.S., Japanese and European companies. China's trading partners have said that quotas and taxes push up rare earths prices abroad, giving buyers in China an unfair advantage. Source: China Cuts Rare Earths Mining Permits (Reliability: High)

Comment: Beijing's restrictions have prompted producers to announce plans to reopen or develop mines in California, Canada, India, Russia, and Malaysia.

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