China rare earth exports down 65pc in Jan-Sept

BEIJING, Nov 30 (Reuters): China's rare earth exports stood at 11,000 tonnes from January to September, down 65 per cent year on year and constituting just 40 per cent of the total export quota for 2011, a government official was quoted as saying Wednesday. Jia Yinsong, a director in charge of rare earths at the ministry of industry and information technology (MIIT), said the decline was mostly caused by falling foreign demand and not by domestic export caps, the official China News Service reported. Foreign customers have complained that China's rare earth sector policies have unfairly reduced global supplies and driven up prices. But Jia said the four-fold surge in rare earth prices this year was justified as they had been significantly undervalued in the last few years. 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. China accounts for more than 95 per cent of the world's output of the 17 rare earth metals, which are crucial for global electronics production, and the defense and renewable-energy industries. It 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. Beijing has said its attempts to impose order on the sector were primarily motivated by environmental concerns, but its policies are also designed to give priority of supply to domestic consumers and to encourage foreign consumers to relocate to China, analysts have said. Jia also said China was planning to introduce a special value-added tax invoice for rare earth companies that he said would help eliminate unlicensed production and smuggling, according to Xinhua News Agency.