China today launched its first rare earth products trade exchange, two days after the World Trade Organisation ruled that the country has broken the rules of global commerce by restricting their exports.
The exchange was opened in Inner Mongolia Autonomous Region after a three-month trial.
The Baotou Rare Earth Products Exchange is expected to regulate the country's rare earth market, improve the way prices are formed and promote development of the industry, Jia Yinsong, a Ministry of Industry and Information Technology official, was quoted as saying by state-run Xinhua news agency.
Rare earths, a class of 17 mineral elements, are one of the most sought-after metals for their vital roles in green technologies like wind turbines, electric car batteries, and of particular concern in military sectors.
China, which has reserves totaling 23 per cent of the global total of rare earths, supplies over 90 per cent of the world's market.
The exchange will introduce three spot transaction modes, namely price bidding, listed trading and real-time trading online with more than 10 trading items including cerium oxide, praseodymium-neodymium oxide and europium oxide.
The WTO has stated that some Chinese raw materials exports have not followed rules on export tariffs and quotas.
The WTO panel upheld the US, EU and Japan's allegation that China had broken rules by limiting exports of materials including rare earths, tungsten and molybdenum.
Expressing regret, China said it is evaluating WTO ruling and the measures needed to be taken in accordance with the WTO dispute settlement protocols.
Rare earth metals are vital for manufacturing high-tech products like smartphones, wind turbines and missiles.
China defends the restrictions on rare earths stating that it faces severe resource and environment pressure as these materials are high-polluting and high-energy consuming.
Located in Baotou City, the exchange was initiated by Baotou Steel Rare Earth (Group) Hi-Tech Company, China's leading rare earth producer and other 11 firms and institutions with a registered capital of 120 million yuan (USD 19.32 million).
The exchange will help integrate resources during their circulation in China and gradually regulate the trading and pricing, said Zhang Zhong, general manager of Baotou Steel Rare Earth Hi-Tech Company, said.
