Move aims to protect environment, resources and regulate industry
Taxes will be increased on rare earth exports starting next year, the Ministry of Finance said on Tuesday, as China, the largest producer of the precious minerals, moves to protect the environment and its resources as well as regulate exports.
Rare earth, a group of 17 minerals, are a vital component in most of the world's new technologies and are used in high-tech processes ranging from wind turbines and hybrid cars to missiles.
The ministry did not specify which of the 17 minerals would be subject to the tax increase. Rare earth exports are currently subject to taxes ranging from 15 to 25 percent.
China has about 30 percent of global rare earth reserves, but produces 97 percent of the world's total. It reduced export quotas for 2010 to 60 percent of 2009 levels, causing alarm among importing countries, such as Japan, about supplies.
The market has yet to feel the impact of the announced tax adjustment.
"Our company will cut rare earth exports next year, but not on a large scale. The higher tariff will affect our exports," said a senior manager of Ganzhou Rare Earth Mineral Industry Co, in Jiangxi province, who declined to be named. The company is the largest State-owned heavy rare earth producer in the province.
Lin Donglu, secretary-general of the Chinese Society of Rare Earths (CSRE) and also chairman of Baotou Steel Rare-Earth (Group) Hi-Tech, the largest producer in the world, said the CSRE has proposed tariff adjustments to relevant ministries but declined to give details.