China rare earths measure may be misleading – Canadian CEO

15 July 2011 17:32  [Source: ICIS news]

TORONTO (ICIS)--China’s move to ease the export of rare earths may be misleading, and could actually imply a tightening of supplies, a Canadian industry executive said on Friday.

China’s Ministry of Commerce announced this week it would ease rare earths exports for the second half of 2011, instead of cutting export quotas.

However, Donald Bubar, CEO of Canada-based Avalon Rare Metals, said as part of the ministry's announcement China would now – for the first time – include ferroalloys, which contain rare earths, in the export quotas.

Until now, rare earths made into ferroalloys were not subject to the quotas, Bubar said.

“So, actually, we are going to see some reduction in the amount of material being exported, by how much, that’s anybody’s guess right now,” Bubar said in a briefing on Canadian business television.

Also, while the Chinese measure was being portrayed as an easing of exports, on an annual basis quotas remained basically unchanged from 2010, he added.

China’s announcement came after the World Trade Organization (WTO) this month ruled against Chinese export restrictions of rare earths and other raw materials, in a case brought against the country by the EU, the US and Mexico.

China export restrictions on key raw materials, such as bauxite, coke, fluorspar, magnesium, manganese, silicon metal, silicon carbide, yellow phosphorous and zinc, have caused concern among the European and US chemicals and.

In the US, legislators warned that a continued dependence on China for rare earths imports puts many US industries at risk.

As for Canada’s Avalon, Bubar said the company is studying a rare earths and metals project in the country’s northwest territories, which could start up in 2015.

In a related development, French chemicals producer Arkema last month announced plans to invest in a Canadian fluorspar mine.

By: Stefan Baumgarten
+1 713 525 2653

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