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EU Can’t Confirm China Is Blocking Rare-Earth Exports

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Oct. 20 (Bloomberg) -- The European Union said it is unable to confirm reports that China is blocking exports of rare earths to the 27-nation bloc.

The EU “cannot confirm claims made by European industry officials in media reports of China blocking rare-earth shipments to the EU,” John Clancy, a spokesman for the European Commission, the EU executive in Brussels, said in an e-mailed statement from Brussels today. “The access to rare earths is a key concern for the European Commission and a key element of European industrial policy. We are therefore monitoring the situation closely.”

The New York Times reported today that the Chinese government has extended an embargo of Japan to include the U.S. and the EU. China, which mines more than 90 percent of the rare earths produced worldwide and cut its second-half export quota by 72 percent this year, denied the report.

Rare earths are a group of 17 chemically similar metal elements, including lanthanum, cerium and neodymium, that are used in relatively small amounts in a range of applications, including Boeing Co. helicopter blades, Raytheon Co. missiles, Toyota Motor Corp. hybrid cars and wind turbines.

The U.S. Trade Representative’s office in Washington is investigating the claims made in the New York Times article, said Nefeterius McPherson, a spokeswoman for the office.

WTO Rules

“We’ve seen the news report and are seeking more information in keeping with our recent announcement of an investigation into whether China’s actions and policies are consistent with WTO rules,” she said.

The U.S. is considering lodging a complaint at the Geneva-based World Trade Organization over China’s restrictions on rare-earth exports. The U.S. has asked business groups and unions to provide evidence that China is hoarding these elements. China curtails exports of the elements through quotas and export taxes of as much as 25 percent, the Government Accountability Office said in April.

Chinese Premier Wen Jiabao has said China didn’t plan to block rare-earth exports or close its market, Clancy said.

To contact the reporter on this story: Jennifer M. Freedman in Geneva at jfreedman@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net