China Sets First Rare Earth Output Quota for 2013 at 46,900 Tons

China, the world’s biggest supplier of rare-earths, set the first of two production quotas for 2013 at 46,900 metric tons of the ore that is refined for use in mobile phones, hybrid cars and missile systems.

The figure is about half the total quota set last year, according to a Ministry of Land and Resources statement posted on its website on Jan 5. The ministry didn’t make public the production quotas last year, while the figure in 2011 was 93,800 tons.

Output quotas for the rest of the year will be announced in the second quarter, according to the statement.

China also set a production quota for tungsten concentrate at 43,500 tons and antimony ore at 37,680 tons, according to the statement, which gave no comparison with previous years.

Since 2007, China has imposed production limits on rare earths and set export restrictions to preserve supply and conserve the environment. The curbs raised trade disputes with the world’s major users, including the U.S. and Japan.

Rare earths are a group of 17 chemically similar elements gaining increasing usage in the shift to cleaner energy sources, such as magnets in wind turbines, hybrid vehicle batteries and catalysts to reduce automobile exhaust emissions.

China, which provides about 95 percent of global rare earth shipments, also cut the first-lot export quota by 27 percent to 15,501 tons from that of 2012, according to a statement by the Ministry of Commerce on Dec. 28.

Demand for some China rare earths has declined as companies such as Toyota Motor Corp. and Hitachi Ltd. (6501) to recycle the metals and employ substitutes. In November, Japan, the world’s biggest importer of rare earths, signed an agreement to buy more of the metals from India to diversify supply.

Praseodymium-neodymium oxide, a light rare-earth product, traded at 285,000 yuan ($45,756) a ton on Jan. 4 in Shanghai, according to researcher Shanghai Steelhome Information. Prices have tumbled 78 percent from a record 1.28 million yuan set in June 2011.

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To contact Bloomberg News staff for this story: Helen Yuan in Shanghai at hyuan@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

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