China denies blocking rare earth exports to Japan

BEIJING, September 23, 2010 (AFP) - China on Thursday denied a report that it had blocked exports of rare earth minerals to Japan amid a row between the regional heavyweights over a Chinese boat captain detained in disputed waters.

The commerce ministry denial came after The New York Times, citing unnamed industry sources, reported China had halted all shipments of the elements to Japan.

Rare earths are essential for making iPods, electric cars, missiles and a range of other products.
"There is no such matter," Chen Rongkai, an official at the commerce ministry, told AFP.

"I don't know where they got this. Everything is going on as normal."

China supplies at least 95 percent of the world's rare earths. It had previously placed restrictions on exports of the minerals, sending market prices soaring and sparking concern among foreign governments and companies.

If exports were being halted, it was probably because China had already reached the lowered annual limit, an industry source, who asked to remain anonymous, told AFP.

Japan's foreign ministry and the world's top automaker Toyota -- one of many companies that would be affected by such a move -- did not answer calls for comment on the report.

Japan and China are embroiled in their worst diplomatic row in years, sparked by the fishing boat captain's arrest after the September 7 collision of his trawler with two Japanese coastguard vessels in the East China Sea.

Chinese Premier Wen Jiabao this week threatened "further actions" if the captain was not released. Beijing has already suspended high-level contacts with Tokyo and called off several official visits.

Last month, before the row erupted, Japan had urged China to expand rare earths exports.
Market prices of some types of rare earth metals have soared more than 20 percent since China announced in July that it planned to reduce global shipments.

Previous media reports said the country was considering banning the export of certain elements and closing mines, which foreign companies and governments fear will deny them access to the much-needed metals and force manufacturers to shift their plants to China.