by Staff Writers
Shanghai (AFP) Aug 24, 2012
China plans to add 18,000 tonnes of rare earths to its strategic reserves following an agreement with a domestic producer, a state-linked newspaper said Friday.
The government agency that manages reserves will buy light rare earths from the country's largest producer, Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-tech Co., the National Business Daily said.
China produces more than 90 percent of the world's rare earths, which are used in high-tech products, and its control over the elements has sparked a dispute with major trading partners.
The report did not offer a figure for the size of current reserves.
Another Chinese newspaper said last month that China had already started the purchase -- using state funds -- and storage of rare earths for strategic reserves.
The latest report said the new deal followed lower prices, and the transaction could take place as early as next month.
The Baotou company declined to comment on the report. But stock of the Shanghai-listed firm ended the morning up 1.20 percent at 38.06 yuan after the news.
China has set production caps and export quotas on rare earths, saying it aims to protect resources and the environment in an effort to promote sustainable development.
But the World Trade Organization plans to investigate the Chinese export restrictions following a request by the European Union, the United States and Japan.
On Wednesday, China announced a slight increase in its annual export quota for rare earths.
The Ministry of Commerce said it had granted an additional quota of 9,770 tonnes for the export of the minerals, bringing the full-year total to 30,996 tonnes from last year's 30,184.
In 2011, China actually exported only 18,600 tonnes despite the quota, which is not always used fully.
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