A call from Minmetals to halt production of rare earth elements yesterday has been greeted with little enthusiasm from rare earth producers and processors in northern China

A call from a government-backed mining giant to halt production of rare earth elements yesterday to reverse a declining trend of prices beginning a half month ago, has been greeted with little enthusiasm from rare earth producers and processors in northern China, Caijing reporters have learned.

In a written proposal, China Minmetals called for a regular production of the precious minerals, saying that it should be in accordance with the directive plan of the Ministry of Industry and Information Technology, the country’s top economic planner.

It also call on these companies to “halt production immediately and voluntarily to ensure a steady operation of the rare earth market beginning from early August.”

China accounts for about 97 percent of the world’s output of the 17 rare earth metals, which are widely used in military weapons, electronics and automobiles. The country had stopped issuing new mining licenses until June 30, 2011.

Productions of the rare earths have met this year’s mandatory target for Minmetals, the 21st Economic Herald reported, quoting an insider of the company.

Zhang Zhong, General Manager of Inner Mongolia Baotou Steel Rare-earth Hi-tech Co., told our reporters in a telephone interview that he had no idea of Minmetals’ call to suspend production. His secretary Zhang Rihui added that no discussions have been on about this issue among the executives.

He told reporters earlier before that the company’s production of rare earths in the first half of this year were “basically consistent with the (government’s) guiding plan.”

Prices of rare earths began to dip since the second half of July after several months’ soaring. Data presented on asianmetal.cn shows that 99.99 percent Europium Oxide, a member of the rare earths group, has seen a daily decline of 1 million yuan per ton on Monday, down by 17 percent from that in mid-July. The price of Cerium Oxide, meanwhile, dropped by 14,000 yuan per ton in two weeks to 173,000 yuan a ton.

Risks have been mounting as dealers began stockpiling a large chunk of rare earths because of soaring prices beginning this year, said a top executive from a private rare earth smelting company. “Minmetals may want to help cushion the plummet of rare earth prices (by making such a call）,” he said.

“We have no plan to suspend production currently, “he added, “sales declined somehow but the company has not been much affected.”