The Dispute Settlement Body (DSB) of the World Trade Organization (WTO) on Monday has created a panel that will effectively kickoff the investigation into the mounting rare earths debate lodged by the U.S., European Union and Japan against China.
Australian rare earths miner Lynas Corp has scheduled for December the start-up of its processing plant in Kuantan, Malaysia, executive chairman Nicholas Curtis said at the annual general meeting in Sydney on Tuesday.
The panel specifically will investigate if China's export duties and quantitative curbs over its exports, most especially on tungsten, molybdenum and other rare earths, are consistent and comply with WTO rules and regulations.
Composed of three people, the WTO panel will investigate the complaint and provide possible recommendations to sort out the dispute, according to the AFP. It has six months to deliver its findings. Yet, it is hoped that an amicable agreement is reached during this period.
The three economic powers European Union, the United States and Japan filed in March a complaint before the WTO, saying Beijing was unfairly limiting exports of the precious rare earths commodities to benefit its domestic industries. They further pointed out such schemes had made the products increasingly expensive.
Spurred by the reduced domestic production and export quotas, prices of tungsten and molybdenum soared more than 530 per cent higher in 2011. Prices further jumped by 10 per cent in the first five months of 2012.
Beijing's exports of rare earths oxides, meanwhile, have dropped 56 per cent in the first five months of this year alone, Bloomberg Government data revealed.
The price chaos prompted the three nations to ask the WTO to establish a panel to look into the matter.
China had repeatedly argued the reduced rare earths production and resulting export curbs were needed to regulate its domestic industry as well as protect its already suffering environment.
Although China had rejected this panel two weeks ago on July 10, under WTO rules, challengers may re-file such request and this time, China can no longer vote against the decision time twice over.
An industry expert from China likewise defended the country's exports curbs are in compliance to WTO rules. He dismissed the three economic powers are scheming and bullying China.
"According to the principles of the WTO, a nation has the right to restrict the export of scarce resources when its reserves are diminishing or when the resource harms the environment. Rare earths is such kind of resource," Han Xiaoping, chief information officer of China5e.com, a Chinese internet portal for energy information, had said earlier this month.
Han Xiaoping believed the acts of the three global economic leaders tantamount to bullying China so it will lower its prices for rare earth.
The current rare earths problem would not be such a nuisance if the other countries speed up their exploitation of rare earths and try to find new rare earth reserves, "so as to help maintain the stability and diversity of the global rare earth market."
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