U.S. military firms likely to face China rare earth restrictions: Global Times

BEIJING (Reuters) - Military equipment firms in the United States will likely have their supply of Chinese rare earths restricted, the Global Times said on Monday, after China’s state economic planner confirmed industry experts have proposed export controls.

FILE PHOTO: Workers transport soil containing rare earth elements for export at a port in Lianyungang, Jiangsu province, China October 31, 2010. REUTERS/Stringer

China is the world’s dominant producer of rare earths -- a group of 17 prized minerals used in everything from consumer electronics to military equipment such as jet engines, missile guidance systems satellites and lasers.

Numerous reports from state-run Chinese media have raised the prospect that China may limit its supplies of the minerals to gain leverage in its trade dispute with the United States.

The Global Times, a newspaper that is published by the ruling Communist Party’s People’s Daily, said on its official Twitter account that U.S. military equipment companies “are likely to face restrictions,” citing unidentified Chinese industry insiders.

China should also work out a list of foreign end-users of Chinese rare earths, it added.

The Global Times comment followed a statement from a spokeswoman for China’s state economic planner, the National Development and Reform Commission (NDRC), earlier on Monday that the NDRC would study and roll out relevant polices on rare earths as soon as possible.

The NDRC recently held three symposiums on rare earths to hear views from industry experts that included suggestions to enact export controls, according to a transcript of comments from NDRC spokeswoman Meng Wei.

China’s rare earth exports in May fell by 16% from April to 3,640 tonnes, according to customs data released last week.

Other proposals heard at the symposiums included accelerating the development of high-end downstream industries and establishing a “traceability mechanism” allowing every shipment of exported rare earth to be tracked, Meng said.

The government resolutely opposes any attempt to use products made with China’s exported rare earths to suppress the country’s development, Meng added.

China will also step up efforts to combat illegal rare earth mining and promote green development of the rare earth industry, she said.

Reporting by Tom Daly and Beijing Monitoring Desk; additional reporting by David Stanway; editing by Darren Schuettler and Christian Schmollinger