Rare metal exports will not used as a bargaining tool: China

China, the largest exporter of the metals, also said that its measures to restrict the exploitation, production and export of rare earths are in line with World Trade Organisation rules.

Zhu Hongren, spokesman for the Ministry of Industry and Information Technology, said, "China will not use rare earths as an instrument for bargaining".

"Instead, we hope to cooperate with other countries in the use of rare earths on the basis of win-win outcomes and jointly protect the non-renewable resource," he said.

Zhu made the remarks after US Secretary of State Hillary Clinton yesterday said that it would welcome any clarification of China's stance on rare earths and encourage countries affected to "seek additional supplies".

China has cut export quotas for rare earths, vital for the production of a range of high-tech products saying that its reserves slumped, due in part to smuggling.
There were earlier reports that it would further cut quotas next year, but the Ministry of Commerce denied the reports, state-run China Daily reported.

Zhu defended the restrictions on rare earth exports, saying that they are for long-term development.

During the past few months some countries, such as Japan, have expressed fears over China slashing exports next year. The US and European Union said earlier this week that they were pressing for solutions.

The issue is expected to be discussed at next month's G-20 summit in South Korea.
Rare earth metals are comprised of 17 elements and are vital in the production of high-tech products such as lasers, missiles, computers and superconductors.

China has 36 per cent of the world's rare earths but supplies about 97 per cent of world demand, pointing to an obvious over-exploitation.

The US accounts for 13 per cent and Russia 19 per cent of global reserves, but they have largely stopped production since they can import the minerals from China at low prices while protecting their own stocks and environment, Chinese analysts said.

Japan, meanwhile, has imported large amounts of the minerals from China and kept part of the imports as "rainy day" reserves.

China also kept a wary eye on India-Japan agreement reached during Prime Minister Manmohan Singh's visit to Tokyo to step up cooperation in the rare earth metals.

Zhu said that China's over-exploitation of the metals has created many
environmental problems, which justifies the country's production and export control policies.

The Commerce Ministry said China's reserves of medium and heavy rare earths may only last 15 to 20 years at the current rate of production, which could lead to China being forced to import supplies.

The Ministry of Foreign Affairs said on Tuesday that it is China's legitimate right to manage its own reserves.