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China Reduces Quotas for Rare Earth Exports (Again)


7/25/2011 8:30 AM

by Clark Silcox, National Electrical Manufacturers Association (NEMA)

China's Ministry of Commerce announced second-half export quotas for rare earth materials this week. The annual quota for all of 2011 that will be available for export, when expressed in terms of tonnage, appears to be the same as 2010. But in reality, it is not. Just two months ago, on May 16, 2011, China announced that ferroalloys containing 10% or more rare earth minerals by weight would be added to the quota computation for the first time. This means that fewer rare earth oxides are available for export from China than before. This is not good news for manufacturers of clean technology products outside of China who purchase rare earth oxides—for products such as electric vehicles, wind turbines, energy efficient lighting—as well as a number of other products that contain components incorporating rare earth minerals such as jet aircraft, military equipment, pollution control equipment, medical imaging equipment, radiation therapy equipment, other electrical and electronic equipment such as ceramic capacitors, superconductors, computers, smartphones, and a variety of other products.

Why is this significant? Because it is impacting the price we pay for some products, and it is imposing a cost disadvantage on products made outside of China. Continued...