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By Michael Martina and Ruby Lian
July 14, 2011 2:21 PM EDT
China eased export curbs for rare earths on Thursday, restoring it to near-2010 levels in a bid to appease its trading partners, but the European Union said the measure did not go far enough to address concerns of stable supplies.
This year's second set of export quotas on the minerals made up for previous cuts and it came just a week after the World Trade Organization ruled against China's curbs on a different mix of raw materials, which some trade partners say could set a precedent.
"This is highly disappointing and the EU continues to encourage the Chinese authorities to revisit their export restrictions policy to ensure there is full, fair, predictable and non-discriminatory access to rare earth supplies as well as other raw materials for EU industries," EU trade spokesman John Clancy said in an emailed statement.
China, which accounts for around 97 percent of the world's rare earth output, has set the second batch of quotas at 15,738 tonnes, bringing the full year total to 30,184 tonnes.
The allocation has almost doubled from last year's second batch of export caps of 7,976 tonnes.
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However, it is down a notch from 2010, when China limited exports of the 17 minerals crucial for global electronics production and the defense and renewable energy industries, to 30,258 tonnes.
"A first analysis of China's rare earth quota announced today shows that there is no noticeable change in the annual amount of rare earth China will allow to be exported to the EU," Clancy said.
China's policies on rare earths are closely tracked by companies and policy makers around the world, especially as suspicions have grown that Beijing was using quotas to give unfair advantages to its own producers.
The issue became a flash point late last year after China halted rare earth shipments to Japan during a diplomatic dispute, a move which worried its trade partners and underscored that Beijing was ready to use its monopoly as a political tool.
China slashed rare earth export quotas by 35 percent for the first half of 2011, choking off global supplies and causing prices to soar.
GOOD TIMING?
The announcement of the quotas coincided with China-EU trade talks in Beijing and comes just a week after the WTO ruled against China's export curbs on eight raw materials, such as bauxite, coke and magnesium.
Some have argued that ruling set a precedent on the legality of export curbs and led Europe and the United States to say China should also be forced to increase exports of rare earths.
At a briefing on Thursday, Chinese Commerce Minister Chen Deming did not mention the new quotas but sounded a note of confidence, telling reporters he was not concerned about any possible WTO challenge to Beijing's rare earths restrictions.
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