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China drops its rare earth export quotas

Asia – China has abandoned its export quotas on rare earths used in smartphones and other high-tech products, the Guardian newspaper has reported. The change has not come as a complete surprise given that China’€™s policy regarding rare earths had been taken to the World Trade Organization (WTO) by the USA and other nations.

New rules appearing in the Chinese ministry of commerce’s trade guidelines for 2015 dictate that rare earths will need an export licence, but there is no quota on the amount that can be sold abroad. After China imposed quotas in 2009, rare earth recycling took off – notably in Japan – while global technology producers campaigned to develop new mines or to reopen existing ones across the world.

According to Chinese customs data, the country exported 22 493 tonnes of rare earths in 2013 and 22 224 tonnes in the first 10 months of 2014. Despite the change in China, industry players are not convinced the market will see a dramatic shift.

′We don′t think it′ll affect our volume significantly,′ Reuters has been told by Amanda Lacaze, ceo of mining company Lynas. ′It′s not like there′s going to suddenly be a flood of product coming on to the market. What is more of an issue is the sort of uncertainty overhang in the market that has been there since the WTO ruling. We saw this in the last quarter, where we had customers drawing down inventories rather than buy fresh product.′

This development saw prices for various rare earth elements drop by as much as 20% in the final three months of 2014, she adds.

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