China establishes rare earth association to improve trade relations and environmental standards

China has announced the creation of a rare earth trade association to help improve the sector’s environmental standards and overseas trade relations.

The association will see the coming together of 155 members from within the sector who will report back to the regulator of Chinese rare earth production, the Ministry of Industry and Information Technology, according to state media reports.

“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,” commented Su Bo, an industry vice minister. 

Bo added that the government is increasing its efforts to grant the industry’s larger firms a greater say in the supply of rare earth metals by phasing out smaller smelters.

According to Xinhua, a total of 13 of the sector’s heavyweight members have agreed to join the newly formed association including Mongolia’s Baotou Steel Rare Earth, Rising Nonferrous in Guangdong and China Minmetals.

Beijing hopes that by consolidating China’s sprawling rare earth industry it can help prevent its long running trade dispute between overseas trade partners from escalating further.

Overseas traders have grown increasingly frustrated with China’s stringent rare earth export quota.

In 2010, China, the world’s largest exporter of rare-earth minerals, decided to limit the export of rare earths by 40 percent to help control both the environmental impact of rare earth excavation and the supply of what is an exhaustible natural resource. As a result the price of exporting minerals has risen sharply in recent years.

Last month, the European Union, Japan and the US joined forces to file a complaint against China to the World Trade Organization (WTO) over the country’s restrictions of rare earth exports, which they feel leaves Chinese firms with a distinct advantage over its own manufacturers as production costs are much lower.

China is accountable for around 97 percent of the world’s supply of the 17 rare earth minerals that are vital in the manufacture of clean-energy technologies, and a myriad of household consumer items such as mobile phones and computers.

Despite the fact that the price of rare earths fell slightly in the second half of last year, a growing number of companies have reacted to the volatile state of the market by investing and researching in ways that it can reduce their reliance on rare minerals. The US Energy Department is also looking at how rare-earths can be used more efficiently, through recycling and by increasing their production domestically. The department has already invested over $30 million to 14 separate research projects.

 

Image 01: Peggy Greb, US Department of Agriculture | Wikimedia Commons

Image 02: Tomihahndorf | Wikimedia Commons

Image 03: US Government | Wikimedai Commons

Image 04: Mrs. Gemstone | Flickr