China Calls to Strengthen International Cooperation in Rare Earth Inudstry

China has set its first round of rare earth export quotas at some 14 thousand tons for 2011. It's down 11% from over 16 thousand tons from the first round of last year. The Ministry of Commerce says that the decision was made to promote sustainable development through international cooperation in the rare earth industry. CRI's Wu Jia has the report.

China has around 30% of the world's rare earth reserves, yet supplies 90 percent of global demand.

In the first three quarters of 2010, the export volume exceeded 32,000 tons, which has already surpassed the quotas set for the whole year. The over-extraction has come with a huge environmental cost.

According to Yao Jian, spokesman for the Ministry of Commerce, China's decision to cut rare earth exports was made amid the government's efforts to promote sustainable development and protect the environment. He calls for more international cooperation in its exploration and production.

"We hope cooperation can be accelerated in the exploration and extraction of once-closed rare earth reserves. Meanwhile, China will continue to adopt a responsible attitude in high-tech cooperation to ensure a reasonable supply."

China's rare earth reserves have experienced a drastic fall in recent years.

A study conducted by United States Geological Survey shows that, as of 2009, China's reserve has decreased to 36 million tons, compared to 87 million tons only four years ago.

However, with respective reserves of 13 million and 19 million tons, the outputs of the United States and Russia were all zero last year.

In addition to China, Russia and the United States, many other countries also have rare earth reserves, which include Australia, India and Brazil.

Xu Xu is Chairman of the China Chamber of Commerce of Metal, Mineral & Chemical Importers & Exporters.

"To the countries which possess rare earth like us, we appeal, on behalf of our rare earth industry, for the joint efforts to explore rare earth resources outside of China and to produce more rare earth products through proven smelting technique. Only in this way can the sustainable and healthy development of the rare earth industry be realized."

Rare earths, composed of 17 elements, can be used in a number of high-tech processes ranging from wind turbines, hybrid cars to missiles.

One of its characteristics is that it can significantly improve the quality and performance of other products. Many countries have considered rare earth as an important strategic resource to upgrade their military capabilities.

For CRI, I'm Wu Jia.