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Shanghai (AFP) Nov 21, 2012
China said Wednesday it would allocate special funds to its rare earths sector to support producers hit by weak prices, but did not give the total amount.
China produces more than 95 percent of the world's rare earths, 17 elements crucial for making a range of hi-tech products.
The country's control over the sought-after resources -- through production caps and export quotas -- has sparked a dispute with major trading partners.
Rare earth miners would receive a subsidy of 1,000 yuan ($160) for every tonne of rare earth oxides they produced, while smelters would get 1,500 yuan ($240) per tonne, China's finance ministry said in a statement.
The ministry would also offer financial support to companies to upgrade production facilities, as well as to fund research and development projects, it said.
Domestic prices of rare earths have fallen this year as the global economic downturn hurt demand.
The central government would also grant local governments a one-time bonus for funding crackdowns on illegal mining, the statement said.
Falling rare earth prices and weak demand have caused some companies to suspend production at their plants.
China's largest rare earths producer, Baotou Steel Rare-Earth, said in late October it would suspend production for a month to try to stem falling prices for the elements.
China has granted the rights for rare earth exports of 30,996 tonnes this year, up slightly from last year's 30,184 tonnes, but the annual quota is not always fully taken up since sales depend on demand.
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