A dispute over rare metals which has been building for years has come to a head: China has been challenged for restricting its exports. It provides 97 percent of the global output. The US, EU and Japan have fired off a formal complaint with the World Trade Organisation (WTO). The objection includes lower prices for Chinese manufacturers. Foreigners pay up to twice as much, yet cannot shop elsewhere. As in Brussels and Tokyo, the White House said Beijing must play fair.
President Obama said: “American manufacturers need to have access to rare earth material which China supplies. Now, if China would simply let the market work on its own, we’d have no objection. But their policies currently are preventing that from happening, and they go against the very rules that China agreed to follow.”
The rare earths case is the first to be jointly filed by the European Union, the United States and Japan. Rare earths are crucial for the defence, electronics and renewable-energy industries.
Beijing set an export quota of 30,258 tonnes in 2011, but it shipped only 16,861 tonnes last year, official data shows. Export prices over the past two years have quadrupled, encouraging buyers to shift operations to China
Beijing said the complaint was unfair and that it would defend itself in the WTO, citing environmental and supply control problems.
A Chinese Foreign Ministry spokesman said: “Exploiting rare earths effects the environment. China is implementing some management policies governing the environment and resources, working on sustainable development. We believe these policies are in line with WTO rules.”
Refining rare earths requires large amounts of acid. It also produces low-level radioactive waste. Extracting the stuff is harmful for the land, for water supplies and for people.
Rare earth metals are generally dispersed. China has them in concentrated and economically exploitable forms, therefore enjoying a monopoly position. The metals go into hi-tech magnets, lasers, batteries, phones, x-ray machines, lamp bulbs and munitions.
Other countries closed their own refineries over concern for pollution, as well as rare earths mines when China undercut world prices in the 1990s, partly thanks to cheap labour and looser standards.