US inquiry into China rare earth shipments

Mini magnets made from chemically processed rare earths are shown in Beijing The 17 different rare earths are found in everything from magnets to hybrid cars and computer monitors

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US trade officials say they are looking into a New York Times report that China is blocking shipments of rare earths to the US and Europe.

China mines 97% of the specialist metals crucial to green technology.

The report, citing anonymous industry sources, said Chinese customs officials had broadened export restrictions.

Meanwhile China's commerce ministry has denied a report by the official China Daily that it will cut quotas by 30% next year to stop overmining.

"The report is completely false," the ministry said in a statement.

"China will continue to supply rare earths to the world, and at the same time, to protect usable resources and sustainable development, China will also continue to impose restrictive measures on exploration, production and import and export of rare earths."

Threat to economy

The US Geological Survey recognises 17 different rare earths.

They are used in everything from catalytic converters in cars to computer monitors, TVs and in pharmaceuticals.

Analysts say without these elements, much of the modern economy would shut down.

China accounts for about 97% of global rare-earth production. The BBC's Paul Mason says the rare earth story goes to the heart of China's relationship with the West.

The US, which is also a major buyer of rare earths, mined no rare earth elements last year.

US trade officials say they are now checking the New York Times report that China is blocking shipments to the US and Europe, following reports of a similar move against Japan.

The newspaper cited unnamed Chinese rare earths officials as saying that "the embargo is expanding".

Nefeterius McPherson of the US Trade Representative's office said: "We're seeking more information in keeping with our recent announcement of an investigation into whether China's actions and policies are consistent with WTO rules."

Washington is investigating whether China is violating international trade rules by subsidising its clean energy industries.

EU trade spokesman John Clancy told the BBC that he was unable to confirm claims made by European industry officials in media reports of China blocking shipments to the EU.

"Chinese Premier Wen Jiabao stressed at the recent EU-China Business Summit that China did not intend to take such action or close its market," Mr Clancy said in a statement.

He said rare earths were a key element of European industrial policy, and that the situation was being monitored closely.

Japan accused China of halting rare earth shipments last month amid a diplomatic row over Japan's detention of a Chinese fishing boat captain whose trawler collided with two Japanese patrol boats.

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