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China's first rare earth products exchange opens

2014/3/31 8:52:43   source:People's Daily Online

  HOHHOT, March 28 -- China's first rare earth products exchange opened on Friday inInner Mongolia Autonomous Region after a three-month trial.

  The Baotou Rare Earth Products Exchange is expected to regulate the country's rare earthmarket, improve the way prices are formed and promote development of the industry,said Jia Yinsong, a Ministry of Industry and Information Technology official.

  The exchange will introduce three spot transaction modes, namely price bidding, listedtrading and real-time trading online, with more than 10 trading items including ceriumoxide, praseodymium-neodymium oxide and europium oxide.

  Located in Baotou City, the exchange was initiated by Baotou Steel Rare Earth (Group) Hi-Tech Co., China's leading rare earth producer, and another 11 firms and institutions with aregistered capital of 120 million yuan (19.32 million U. S. dollars).x China is the world'slargest rare earth producer and exporter, accounting for more than 90 percent of theworld's supply. However, the country lacks pricing power in the global market and wildswings in the price of resources have had a negative effect on Chinese producers.

  The exchange will help integrate resources during their circulation in China and graduallyregulate the trading and pricing of them, said Zhang Zhong, general manager of BaotouSteel Rare Earth Hi-Tech Co..

  Rare earth metals are vital for manufacturing high-tech products ranging fromsmartphones and wind turbines to electric car batteries and missiles.

  Zhang said the exchange will improve transparency of the market and help China secure abigger say in the pricing of rare earth products to stabilize the market.

  Zhang Anwen, deputy secretary general of the Chinese Society of Rare Earths, said Chinahas been the biggest rare earth supplier over the past 20 years with huge cost to resourcesand the environment, but the prices of the rare earths have long been depressed.

  "Chinese companies have suffered great losses and the whole rare earth industry has failedto develop healthily," he said.

  Zhang Anwen said countries like the United States, Australia and Canada actually have richrare earth resources, but are reluctant to exploit them because of the huge costs andenvironmental pollution that would be incurred.

  "Even if foreign countries consuming Chinese rare earth products do not say 'Thank you,'they should at least acknowledge that China exports so much rare earth while strugglingwith the resulting pollution at home," he said.

  Zhang Anwen made the remarks after the World Trade Organization (WTO) ruled onWednesday that China's export duty, export quotas, and export quota administration andallocation measures imposed on rare earths, tungsten and molybdenum products wereinconsistent with WTO rules and China's Accession Protocol.

  Besides export quotas, China has also implemented policies including output caps, stricteremissions standards and high resource taxes to curb environmental degradation andprotect the resources.

  "What China is doing is to protect the environment to ensure coordinated developmentbetween human beings and resources as well as the environment," said Zhang Anwen,adding that foreign countries should respect China's stance and shoulder commonresponsibility to establish a diversified global rare earth supply system that would benefiteveryone.

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