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Saturday, Sept. 25, 2010

Ohata may take rare earths halt to WTO


Staff writer

Trade minister Akihiro Ohata said Friday the ministry has received some reports confirming imports of rare earths from China have been halted, saying Japan may file a complaint with the World Trade Organization if it is a retaliatory move by Beijing over the detention of a Chinese trawler captain.

"We have only received fragments of information (from trading companies), and we're trying to understand the overall situation," Ohata told a news conference in the morning at the Ministry of Economy, Trade and Industry.

If the government finds Beijing is delaying the process intentionally, "we would take appropriate action according to (WTO) rules," Ohata said.

He also expressed his concern at the situation, noting that if the rare earths trade is stopped for long, "the effect (on Japan's manufacturing industry) would be considerable."

Japan imported 31,383 tons of rare earths in 2008, of which 29,275 tons, or 92 percent, came from China, according to data compiled by Japan Oil, Gas and Metals National Corp., a government-affiliated organization.

According to Ohata, several Japanese trading companies reported being told by Chinese exporters of rare earths that they had to stop the shipping process as they expected China's authorities to issue a ban on such exports to Japan.

The New York Times and Japanese media earlier reported China slapped an export ban on rare earth exports to Japan, but the Chinese Trade Ministry has officially denied this.

China's reported ban on rare earths exports was considered a measure to pressure Japan to release the detained Chinese captain of a fishing boat that collided with two Japan Coast Guard vessels near the disputed Senkaku Islands earlier this month.

Prosecutors in Naha, Okinawa Prefecture, announced Friday they will release the captain without indictment, taking into account the strain the incident has put on bilateral relations.

Some of the companies that deal with rare earths, however, said they have not officially confirmed the trade has been halted.

"We are gathering information (on what's happening in China) now," said Hideki Aihara, a spokesman for Shin-Etsu Chemical Co., which makes rare earths magnets for motors in products like hard-disk drives and air conditioners.

At the same time, "rare earths are not materials we buy on a daily basis . . . so the immediate impact is almost nothing so far," he said.

He added that the company, which uses elements like neodymium, has some stocks of rare earths and so is able to smoothly continue its business for a while, although he did not comment on stock levels or how long they will last.

One trade company that asked to remain anonymous said it has heard exports were stopped on Tuesday but had not heard whether it was an order from the Chinese government.

A spokesman for the company, which imports all kinds of rare earths, said China is currently in holiday season, so it is a possibility trade has stalled because of the time of year, adding that the company is still trying to confirm the exact situation.



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