updated 06:40 pm EST, Tue January 31, 2012
Ruling not likely to up China rare earth exports
The World Trade Organisation has now concluded its investigation of China's self-imposed rare earth export restrictions. The ruling has decided against China, and will push it to change policies. The panel ruled that China violated global trade laws by artificially restricting exports of ram materials such as bauxite, coke, magnesium, manganese, and zinc, thus cutting supply and unfairly giving its own companies an unfair advantage.
A group of 17 rare earth metals key to the production of various electronic devices was not part of the ruling, however.
China is likely to remove its export quotas for the metals but then keep production limits in place that are meant to slow environmental damage from mining them. The WTO ruling body said China was "unable to demonstrate" that its restrictions had a positive effect on public health, pollution reduction, or resource conservation.
The country is responsible for nearly 95 percent of global rare earth supplies. It capped production in 2011 at 93,800 tonnes, or just five percent higher than in 2010, which was for from the soaring demand for the metals.
There may soon be other places to buy rare earths from, however, as Japan found a number of large deposits last summer. Also, production in Canada, California, and Russia is also in the process of restarting, though will take some time before production ramps up in sufficient supply. Australia, Canada, and the US stopped mining rare earths in the '90s in favor of less costly Chinese imports.
The metals are key to the production of components such as LCD panels used in TVs, tablets, and smartphones. A shortage can potentially cap production for key companies that need large volumes.