Maximizing rare earths profits is key

China's restrictions on exports of rare earths are aimed at maximizing profit, strengthening its homegrown high-tech companies and forcing other nations to help sustain global supply, experts say.

China last year produced 97 percent of the global supply of rare earths - a group of 17 elements used in high-tech products ranging from flat-screen televisions to iPods.

"China is saying they're not interested in supplying the world's rare earths indefinitely," said Geoff Bedford, vice-president of Canada-listed Neo Technologies - a rare earth processor operating in China.

"So they're showing signs of cutting back and they're expecting other mines to come in."

The world's top consumers of rare earths, especially Asian neighbor Japan, have rung the alarm bell in recent weeks, accusing China of disrupting exports of the vital minerals.

A commonly-held view among officials in Beijing is that rare earth policies in the past were like "selling gold to foreigners at the price of Chinese radishes", Damien Ma, an analyst at Eurasia Group, wrote in a research note.

Since 2006, China has cut export quotas on rare earths by five to 10 percent a year. Production has also been slashed amid concerns that Chinese supplies of the rare metals could run out in 15 years. By cutting foreign supply and increasing the rare earths available to high-tech companies within China, Beijing is pushing its economy up the value chain, said Metal-Pages analyst Nigel Tunna.

Source: Global Times