China sets up rare earths industry group


By Elaine Kurtenbach , AP

SHANGHAI — China has set up a rare earths industry association to fend off trade complaints and help regulate the sector that is critical to global high-tech manufacturing. The Ministry of Industry and Information Technology (MIIT) announced the group’s founding Sunday, saying it would coordinate mining, smelting and processing and seek to form a “reasonable price mechanism” for the materials, used in many high-tech applications. It said the group would help coordinate China’s response to rare earth trade disputes such as a complaint alleging unfair market manipulation that was filed last month by the U.S., EU and Japan at the World Trade Organization. Rare earths are used to make goods including hybrid cars, weapons, flat-screen TVs, mobile phones, mercury-vapor lights, and camera lenses. China has about a third of the world’s rare earth reserves but supplies about 90 percent of what is consumed. Beijing has imposed limits on rare earths production and exports, citing a need to impose order on an unruly domestic market and to reduce environmental damage, raising protests from Japan, the U.S. and other countries that rely on supplies from China. A key aim is to rein in wide swings in prices, said Heng Kun, a rare earth analyst at Essence Securities, based in Beijing. “The whole industry should just avoid price volatility. It does harm to all,” he said.