China may stockpile more medium-to-heavy rare earths this year as the nation prepares to contest a World Trade Organization ruling against its export controls, said Peng Bo, an analyst at Huachuang Securities Co.
The government is in talks with producers to purchase materials such as terbium, lutetium and yttrium, which are used in applications ranging from lasers to nuclear reactors, said Peng.
The State Reserve Bureau has agreed with a group of companies to buy rare earths at prices at least 10 percent higher than market rates, Shanghai Metals Market reported today, citing people in industry it didn’t identify. China, which accounts for 90 percent of global rare earths production, will also seek to strengthen export controls, even after the WTO ruled against its curbs, according to Beijing Antaike Information Development Co.
The government may increase mining taxes and export license fees, build up strategic reserves and impose stricter environmental guidelines for producers, Chen Huan, an analyst at Antaike, said on April 3.
“The country will try to focus on streamlining and controlling domestic production, and buying up local supply of the medium-to-heavy rare earths will also reduce the supply that’s available for export,” said Peng from Huachuang Securities.
A dispute-settlement panel at the Geneva-based WTO on March 26 sided with the U.S., Japan and Europe in determining that China didn’t adequately justify imposing export duties and quotas. China cut mining permits and imposed production and export quotas in 2007 to reduce pollution and conserve supplies.
China may file an appeal against this WTO ruling soon, the Economic Information Daily reported today, citing a person it didn’t identify.
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