WTO rules against China’s rare earth elements export cap

Posted on 27 Mar 2014 by Tim Brown
Making inroads into China
China said its capping of rare earth minerals was aimed at reducing pollution and conserving resources.

China's imposed limits on the exports of its rare earth elements are against global trade rules, the World Trade Organization (WTO) ruled yesterday, providing a victory for Europe and the US who had argued that the practice was unfair.

“Today’s ruling by the WTO on rare earth shows that no one country can hoard its raw materials from the global market place at the expense of its other WTO partners,” said EU Trade Commissioner Karel De Gucht.

The Chinese Ministry of Commerce said the country had imposed the limits to enhance the management of resource products which are high-polluting and high-energy consuming.

“This meets the requirement of protecting such resources that can be exhausted… and also contributes to the global sustainable development,” said an unidentified official with the ministry.

However, the WTO said the limits helped “secure preferential use” of the elements for domestic firms. In its ruling, the WTO said: “The overall effect of the foreign and domestic restrictions is to encourage domestic extraction and secure preferential use of those materials by Chinese manufacturers”.

“Accordingly, the panel concluded that China’s trading rights restrictions breach its WTO obligations.”

The Xinhuanet news website reported that China’s Ministry of Commerce reacted with regret at the ruling but said the ministry is evaluating the report and adopting measures in accordance with WTO dispute settlement protocols.


What are rare earth elements?

Rare earth elements (or rare earth minerals) are used in many applications including: mobile phones, speakers, telescopes, catalytic converters, x-ray machines and many other applications. According to the BBC, China accounts for more than 90% of rare earth global production.

According to Namibia Rare Earths, there are 17 elements found on the earth that are classified as rare earth elements (REE). The term ‘rare’ does not mean these elements are necessarily scarce, with the exception of the radioactive promethium, they are in fact relatively plentiful in the Earth’s crust, with cerium being the 25th most abundant element at 68 parts per million (similar to copper).

However, because of their geochemical properties, rare earth elements are typically dispersed and not often found concentrated as rare earth minerals in economically exploitable ore deposits. The term “rare earth” comes from their initial discovery in which only tiny portions of these minerals could be isolated from larger quantities of still more common elements.

Z ELEMENT SYMBOL USE
21 Scandium Sc Aerospace framework, high-intensity street lamps, high performance equipment
39 Yttrium Y TV sets, cancer treatment drugs, enhances strength of alloys
57 Lanthanum La Camera lenses, battery-electrodes, hydrogen storage
58 Cerium Ce Catalytic converters, colored glass, steel production
59 Praseodymium  Pr Super-strong magnets, welding goggles, lasers
60 Neodymium Nd Extremely strong permanent magnets, microphones, electric motors of hybrid automobiles, laser
61 Promethium Pm Not usually found in Nature
62 Samarium Sm Cancer treatment, nuclear reactor control rods, X-ray lasers
63 Europium Eu Color TV screens, fluorescent glass, genetic screening tests
64 Gadolinium Gd Shielding in nuclear reactors, nuclear marine propulsion, increases durability of alloys
65 Terbium Tb TV sets, fuel cells, sonar systems
66 Dysprosium Dy Commercial lighting, hard disk devices, transducers
67 Holmium Ho Lasers, glass coloring, High-strength magnets
68 Erbium Er Glass colorant, signal amplification for fiber optic cables, metallurgical uses
69 Thulium Tm High efficiency lasers, portable x-ray machines, high temperature superconductor
70 Ytterbium Yb Improves stainless steel, lasers, ground monitoring devices
71 Lutetium Lu Refining petroleum, LED light bulbs, integrated circuit manufacturing