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China seeks to raise prices of rare earths

China Seeks to Raise Prices of Rare Earths

BEIJING – Chinese rare earths are undervalued due to fierce competition and face low resource use, which would lead to a race to the bottom, the country’s industry minister said on Monday.
“Our rare earths were not sold at the ‘rare’ price but sold at the ‘earth’ price … because of a tender, which wasted the precious resource,” Xiao Yaqing, from the Ministry of Industry and Information Technology, said in a press briefing.
Threats from China, the world’s largest producer of rare earths – a group of 17 minerals used in military equipment, consumer electronics and electric vehicles – to curb exports of these materials to the United States have left Washington to looking for alternative supplies.
The country’s rare earth exports hit a five-year low in 2020 amid pandemic-stricken overseas demand and increasing supply in domestic industries.
MIIT proposed in January to tighten regulation of the rare earth industry chain, including a stipulation that importers and exporters comply with foreign trade and export control laws.
“The government should play a role in policing the market, to lose what can be relaxed and control what needs to be controlled,” Xiao said.
The minister said some producers were producing excessive amounts of rare earths, causing environmental problems and resulting in low rates of resource use.
Meanwhile, the industry also lacks high-quality rare earth products, which runs counter to innovation and technological advancement, he added.
“We should learn from Japanese companies in this regard, because many Japanese companies have done a lot of work on high-end rare earth products,” he added.
China’s rare earth mining quota in the first half of 2021 was set at 84,000 tonnes, a 27% jump from the previous year.
Rare earths are primarily used in the manufacture of permanent magnets used in wind turbines, the drivetrain of hybrid and electric vehicles, and fuel-efficient applications, which currently account for 29% of total global demand.

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