China has ended its policy of imposing quotas to restrict exports of rare-earth minerals after it lost a dispute at the World Trade Organization in 2013.
The measure, imposed in 2009, also proved to be of little value for China as many countries found other sources for the materials, which are widely used in high-technology industries such as smartphones and missile systems, the Wall Street Journal reported.
“The change is likely because of the pressure from the WTO decision,” Frank Tang, an analyst at investment bank North Square Blue Oak, was quoted as saying. “China is saying that as a WTO member, it’ll have to abide by WTO rules.”
Rare-earth prices surged as much as tenfold after China slashed export quotas on the 17 elements by 40 percent in what it said was an effort to curb pollution in the mining industry.
The move triggered a major row between China and its trading partners. In 2012 the United States, European Union and Japan complained that China was using the quota to push up global rare-earth prices in violation of WTO rules.
Last year, a WTO panel ruled that China had failed to justify the use of quotas for its exports of the minerals.
Meanwhile, the world has reduced its reliance on the minerals from China, which until recent years produced about 93 percent of the global supply, the newspaper said.
Other producers ramped up their exports of the minerals, and as a result, China’s shipments often fell short of the maximum limit under the quota system.
In the first 11 months of last year, the country exported 24,866 metric tons of rare earths, well below its 2014 quota of 30,611 tons, according to Chinese customs data. Exports totaled 22,493 tons in 2013, sharply lower than the 30,996-ton quota.
Instead of quotas, China will now monitor rare-earth exports through a system of permits issued on the basis of trade contracts, the report said, citing a statement from the commerce ministry.
– Contact us at [email protected]