Looming resource war: China begins stockpiling rare earths in strategic reserve
July 5, 2012– BEIJING – China has started stockpiling rare earths for strategic reserves, a state-backed newspaper said Thursday, in a move that may raise more worries over Beijing’s control of the coveted resources. China has already started the purchase — using state funds — and storage of rare earths for strategic reserves, the China Securities Journal said, but did not specify exactly when the initiative was launched. “This is China’s start of work for state strategic buying and storage of rare earths,” the newspaper said. The country produces more than 90 percent of the world’s rare earths, which are used in high-tech equipment ranging from iPods to missiles, and it has set production caps and export quotas on them. Major trading partners last month asked the World Trade Organization (WTO) to form a panel to resolve a dispute over China’s export limits on rare earths after earlier consultations through the global trade body failed. The European Union, the United States and Japan accuse China of unfairly choking off exports of the commodities to benefit domestic industries. China has previously defended its rare earths policies, saying they aim to protect resources and the environment as part of an effort to promote sustainable development. A Chinese official said last month the regulation of the rare earths industry was in line with global trade rules. China had already announced its intention to build a strategic reserve system, but had not publicly said that it had started stockpiling.