China sets up rare earth body to shake up industry

BEIJING Tue Apr 10, 2012 7:33am EDT

Labourers work at a site of a rare earth metals mine at Nancheng county, Jiangxi province March 14, 2012. REUTERS/Stringer

Labourers work at a site of a rare earth metals mine at Nancheng county, Jiangxi province March 14, 2012.

Credit: Reuters/Stringer

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BEIJING (Reuters) - China on Sunday set up a rare earth industry association, state media reported, in a move to speed up consolidation of its sprawling industry that has drawn fire for what overseas trade partners call unfair export quotas.

The association, with 155 members across the country, will report to the Ministry of Industry and Information Technology, which regulates rare earth production, the official Xinhua news agency said.

Baotou Steel Rare Earth in Inner Mongolia, Rising Nonferrous in Guangdong and China Minmetals are among 13 heavyweight members, Xinhua said.

Su Bo, an industry vice minister, said Beijing wanted to shake up the industry by phasing out small smelters, giving big players a greater stake in the supply of rare earth metals and boosting environmental protection.

"China will continue to clean up the rare earth industry, expand rare earth environmental controls, strengthen environmental checks, and implement stricter rare earth environmental policies," Su said.

Xinhua said the long-awaited body would promote international exchanges and help Chinese companies to handle trade disputes. China's rare earth export quota is managed by China's Ministry of Commerce.

The European Union, the United States and Japan complained to the World Trade Organization last month that China is illegally choking off exports of rare earths to hold down prices for its domestic manufacturers and pressure international firms to move operations to China.

China accounts for about 97 percent of world output of the 17 rare earth metals crucial for the defense, electronics and renewable-energy industries and used in a range of products such as the iPhone, disk drives and wind turbines.

Beijing has said its export curbs are necessary to control environmental problems caused by rare earth mining and to preserve supplies of an exhaustible natural resource.

(Reporting by Zhou Xin and Michael Martina; Editing by Ron Popeski)

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