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China denies rare earth ban on Japan
FRICTION: While reports of a ban couldn’t be confirmed, researchers said
Beijing could cut rare earths and other exports to Japan if the spat over the
Diaoyutais escalates
REUTERS , BEIJING
Friday, Sep 24, 2010, Page 4
A Chinese trade official yesterday denied a New York Times
report that China had banned exports of rare earths to Japan following the
arrest of a Chinese trawler captain near the disputed Diaoyutai Islands (釣魚台).
The report, which was sourced to unnamed industry experts, said an initial trade
embargo on all exports of rare earth minerals would last through the end of this
month.
“China has not issued any measures intended to restrict rare earth exports to
Japan. There is no foundation for that,” said Chen Rongkai (陳榮凱), a spokesman
for China’s Ministry of Commerce.
“I don’t know how the New York Times came up with this, but it’s not true. There
are no such measures,” Chen said.
This week, Chinese Premier Wen Jiabao (溫家寶) threatened retaliatory steps against
Japan unless it released the trawler captain, whom Tokyo accuses of ramming two
Japanese coastguard ships.
Major rare earths traders in China and Japan said they had not heard of any ban.
One Japanese trade official said he had heard rumors of an embargo, but could
not comment further.
Rare earths, a group of 17 metallic elements including yttrium and lanthanum
used in small quantities to enhance batteries, computer and weapons systems,
and other applications, are generally found together.
China is the dominant source of rare earths, accounting for 97 percent of world
supply last year. Steep cuts in export quotas for the second half of this year
mean that total export quotas for this year are about 40 percent below last
year’s levels.
“Rare earths export quotas were cut pretty sharply and have been basically used
up, you can’t export any to Europe or the US either. People think it’s about
Japan, but it isn’t,” said Bruce Zhang (張曉鑫), a rare earths expert at
consultancy Asian Metal.
“This has nothing to do with the fishing boat incident. The export quotas were
issued long before that,” he said.
China has gradually over several years reduced exports of rare earths and some
minor metals through a quota system designed to keep more of the minerals for
its own industry. That effort has been undermined by smuggling, especially
through Vietnam.
The trawler dispute, which analysts say is largely a row over energy resources
beneath the sea around the disputed Diaoyutai or Senkaku islands, has heightened
tensions between Asia’s biggest economies.
Beijing has suspended high-level contacts with Japan over the issue and
postponed talks on increasing flights between two countries with close business
and trade ties.
Japanese prosecutors have until Sept. 29 to decide whether to bring charges
against the captain.
Chinese media have quoted researchers as speculating that cutting rare earths
and other exports to Japan would be an option open to China, if the spat
escalates.
“Japan has a great need for these resources from China, reducing or restricting
resource exports to Japan would be a useful measure,” the Global Times newspaper
cited Ministry of Commerce researcher Tang Chunfeng (唐淳風) as saying.
Rare earth miners in Canada, Australia and elsewhere are citing the reduction of
supply from China when seeking financial backing for their own projects, leading
some industry experts to project that any supply squeeze will be short-lived.
Also this week, hundreds of workers at a unit of Japanese-owned Synztec
Precision Parts (Shenzhen) Co went on strike for higher pay, the Hong Kong Apple
Daily yesterday quoted Shenzhen television as saying.
The strike was the latest in a series of labor actions by Chinese workers at
Japanese factories this year.
An employee at Synztec Precision confirmed the strike at the company’s
subsidiary in Longgang, but said she believed the dispute was resolved. She said
she had no other information.
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