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China insists exports of rare earths won’t be a ‘bargaining tool’

By Joe McDonald
Associated Press / October 29, 2010

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BEIJING — China said yesterday it will not use exports of rare earths, exotic minerals required by high-tech industry, as a diplomatic “bargaining tool’’ while Washington pressed Beijing to clarify its policy following its de facto ban on supplies to Japan.

China accounts for most rare earths production, and global manufacturers that need them to produce mobile phones and other goods were alarmed when Beijing blocked shipments to Japan last month amid a squabble over disputed islands.

“China will not use rare earths as a bargaining tool,’’ said Zhu Hongren, a spokesman for the Ministry of Industry and Information Technology at a news conference. “Rather, on the basis of cooperation, development and a win-win outcome, we will have cooperation with other countries in the use of rare earths, because it is a nonrenewable energy resource.’’ Zhu did not answer a reporter’s question about when normal rare earths exports would resume.

Meanwhile, US Secretary of State Hillary Clinton called on China to clarify its policy on rare earths. She said recent Chinese restrictions served as a “wake-up call’’ for the industrialized world.

“I would welcome any clarification of their policy and hope that it means trade and commerce around these important materials will continue unabated and without any interference,’’ she said Wednesday at a news conference in Honolulu after meeting with Japanese Foreign Minister Seiji Maehara.

Japanese companies say Beijing has blocked rare earths shipments to Japan since Sept. 21 after a Chinese fishing boat captain was detained near disputed islands. The captain was later released but Japanese authorities say supplies have yet to resume.

Many see China’s action as indicative of its growing aggressiveness in dealing with disputes.

China has about 30 percent of rare earths deposits but accounts for about 97 percent of production. The United States, Canada, and Australia have rare earths but stopped mining them in the 1990s as lower-cost Chinese supplies became available.