The New York Times — HONG KONG – Sharply raising the stakes in a dispute over Japan’s detention of a Chinese fishing trawler captain, the Chinese government has blocked exports to Japan of a crucial category of minerals used in products like hybrid cars, wind turbines and guided missiles.
Chinese customs officials are halting shipments to Japan of so-called rare earth elements, preventing them from being loading aboard ships at Chinese ports, industry officials said on Thursday.
On Tuesday, Prime Minister Wen Jiabao personally called for Japan’s release of the captain, who was detained after his vessel collided with two Japanese coast guard vessels about 40 minutes apart as he tried to fish in waters controlled by Japan but long claimed by China. Mr. Wen threatened unspecified further actions if Japan did not comply.
A Chinese Commerce Ministry official declined on Thursday to discuss the country’s trade policy on rare earths, saying only that Mr. Wen’s comments remained the Chinese government’s position. Bloomberg reported from Singapore that Chen Rongkai, a spokesman for the Ministry of Foreign Trade and Economics Cooperation, had denied that an embargo had been imposed, but the report did not address the halt in shipments.
China mines 93 percent of the world’s rare earth minerals, and more than 99 percent of the world’s supply of some of the most prized rare earths, which sell for several hundred dollars a pound.
Dudley Kingsnorth, the executive director of the Industrial Minerals Company of Australia, a rare earth consulting company, said that several executives in the rare earths industry had already expressed worries to him about the export ban. The executives have been told that the initial ban lasts through the end of the month, and that the Chinese government will reassess then whether to extend the ban if the fishing captain still has not been released, Mr. Kingsnorth said.
“By stopping the shipments, they’re disrupting commercial contracts, which is regrettable and will only emphasize the need for geographic diversity of supply,” he said. He added that in addition to telling companies to halt exports, the Chinese government had also instructed customs officials to stop any exports of rare earth minerals to Japan.
Industry officials said that mainland China’s customs agency had notified companies that they were not allowed to ship to Japan any rare earth oxides, rare earth salts or pure rare earth metals, although these shipments are still allowed to go to Hong Kong, Singapore and other destinations. But no ban has been imposed on the export to Japan of semi-processed alloys that combine rare earths with other materials, the officials said. China has been trying to expand its alloy industry so as to create higher-paying jobs in mining areas, instead of exporting raw materials for initial processing.
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China Denies Japan Rare-Earth Ban Amid Diplomatic Row (23-09-10) / Sept. 23 (Bloomberg) — China denied reports it banned the export of rare earths to Japan in retaliation for the detention of a Chinese fishing boat captain, threatening supplies of a raw material vital to hybrid cars, laptops and iPhones.
“China does not have a trade embargo on rare earth exports to Japan,” Ministry of Commerce spokesman Chen Rongkai said in a telephone interview today. Industrial Minerals Co. of Australia, an industry publication and consultancy, first reported the ban yesterday, citing an unidentified “leading Japanese rare earth buyer.”
“The Chinese government has requested exporters to demonstrate support for the Chinese situation and suspend exports of rare earths to Japan until the end of the month when the situation will be reviewed,” said Industrial Minerals owner and former mining executive Dudley Kingsnorth. “It’s very regrettable if we have the effective suspension of commercial contracts for political reasons.”
True or false, the reports may fuel concerns over China’s control of more than 95 percent of the global supply of rare earths. The U.S. Department of Defense is this month due to complete a review of its dependency on the minerals for missile guidance systems, smart bombs and satellites.
China cut export quotas for the minerals by 72 percent for the second half of this year, citing a shortage of supply for domestic manufacturers. The accusations of further restrictions to Japan come as Asia’s two biggest economies are embroiled in a diplomatic row over the Sept. 7 detention of the skipper in waters around a group of uninhabited islets and outcrops about 200 miles (322 kilometers) off the northeast coast of Taiwan.
Chinese Premier Wen Jiabao this week demanded Japan “immediately and unconditionally” release the skipper or face retaliatory action. Japan has refused to let him go, saying that the case is being handled in the country’s court system.
China said this week it had severed senior-level government contacts after Japanese prosecutors extended the captain’s detention until Sept. 29. Japan’s foreign ministry on Sept. 20 said China had revoked an invitation for 1,000 youths to attend the Shanghai World Expo, and ticket sales for two concerts in the city by pop band SMAP were suspended, Asahi newspaper reported.
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