Ohata calm over China`s decision to cut rare earth export quotas+

TOKYO, Dec. 28 Kyodo -
Japan's industry minister Akihiro Ohata on Tuesday accepted calmly China's
announcement earlier in the day that it will cut its rare earth export quotas
for the first half of 2011 by 35 percent compared with the same period this
year, saying it was ''roughly in the form of what we had in mind.''
An official of the Ministry of Economy, Trade and Industry, briefing reporters,
said that while he needs to further analyze the details to evaluate the latest
move, the announcement showed China's intention ''not to sharply cut'' the
quotas from the previous year.
China said Tuesday that it will allot around 14,400 tons for export in the
first half of 2011, about half of the total export quota for 2010, which stood
at around 30,000 tons.
''We cannot evaluate (China's announcement) without analyzing the content...but
I think the quota was decided roughly in the form of what we had in mind,''
Economy, Trade and Industry Minister Ohata told reporters.
China supplies more than 90 percent of the world's rare earth minerals and
Japan is largely dependent on China for supply of the strategically important
resources.
The ministry official also said that China appears to have moved closer to
Japan's view that it is better not to affect global production activity by
drastically cutting exports of rare earth minerals, which are used in the
production of high-tech products such as cellphones, digital cameras and hybrid
vehicles.
China's decision elicited mixed reactions from Japan's major trading houses.
''We can't be optimistic but it wasn't the worst-case scenario as (the export
quotas for the first half of 2011) turned out to be more than that for the
second half of this year,'' said an official of a major trading firm.
Earlier this year, Chinese rare earth exports to Japan were temporarily
disrupted amid bilateral tension following collisions in September between a
Chinese trawler and Japanese patrol boats near the disputed Senkaku Islands in
the East China Sea.
Another trading house official said, however, that supplies of rare earth
minerals could be lower than the allowed export quotas as ''stricter
restrictions by the Chinese government could prompt Chinese mining firms to
hold off supplies.''
''There will be a supply shortage of around 11,300 tons of rare earth minerals
in the Japanese market next year,'' the official predicted.
==Kyodo