* First tranche for next year set at 10,546 tonnes
* More quotas in reserve for firms that have not yet passed
* Biggest producer Baotou Rare Earth still awaiting
(Recasts, adds detail of quotas in "reserve")
BEIJING, Dec 27 China will keep rare earth
export quotas for 2012 at this year's levels, it said on
Tuesday, a move that will ease overseas worries about the supply
of 17 crucial elements used in high-tech manufacturing.
China accounts for more than 95 percent of the global output
of rare earths, which are used in the electronics, defense and
renewable energy industries.
Beijing imposed an export quota of 30,184 tonnes this year,
down only marginally from 30,258 tonnes in 2010, but still
enough to stoke concern in the United States and elsewhere that
it was seeking to strengthen its chokehold on global supplies.
The government said overall export quotas for the whole of
2012 would remain flat from 2011 "in order to guarantee
international market demand and keep rare earth supplies
The Ministry of Commerce (MOFCOM) said the first tranche of
rare earths export quotas for next year had been set at 10,546
tonnes, but that figure only included those enterprises that had
passed a series of stringent environmental inspections.
The first batch of quotas consists of 9,095 tonnes
of light rare earths and 1,451 tonnes of heavy rare earths.
MOFCOM said earlier this month that a total of 11 firms had
already been given the official go-ahead to export rare earths,
including seven producers and four trading companies.
Quotas have been reserved for other firms -- including
China's biggest producer, Baotou Rare Earth -- but
will only be released if they are found to have complied with
The ministry said 12,605 tonnes of export quotas for light
rare earths and 1,753 tonnes for heavy rare earths were now held
in reserve for the companies still being inspected.
That brings the first tranche of quotas to a total volume of
24,904 tonnes. MOFCOM said the second tranche would bring the
figure up by another 20 percent.
If the firms fail to qualify once the inspections are
completed in July next year, the quotas will be reallocated but
not reduced, it said.
Total exports stood at only 14,750 tonnes in the first 11
months of this year amid a nationwide inspection and crackdown
on illegal activities in the sector.
China has been cracking down on illegal producers and
traders since August, aiming to bring the sector under the
control of a handful of favoured enterprises.
China's attempts to restrict output and exports have caused
widespread alarm overseas, but Beijing has insisted that its
attempts to impose order on the sector were primarily motivated
by environmental concerns and are compliant with World Trade
Analysts have said its policies are also designed to give
priority of supply to domestic consumers and encourage foreign
consumers -- mostly from high-tech strategic sectors -- to
relocate their operations to China.
(Reporting by Aizhu Chen, David Stanway and Ruby Lian; Editing
by Sugita Katyal)