China rare earths producer suspends output

State-owned Baotou Steel Rare Earth (Group) Hi-tech Co. said in a statement released through the Shanghai Stock Exchange that it suspended production Tuesday to promote "healthy development" of rare earths prices. It gave no indication when production would resume and phone calls to the company on Thursday were not answered.

Beijing is tightening control over rare earths mining and exports to capture more of the profits that flow to Western makers of lightweight batteries and other products made of rare earths. China has about 30 percent of rare earths deposits but accounts for more than 90 percent of production.

Beijing alarmed global manufacturers by imposing export quotas in 2009. It also is trying to force Chinese rare earths miners and processors to consolidate into a handful of government-controlled groups.

Baotou Steel Rare Earth announced a similar one-month halt to production last October, also in an attempt to push up prices by reducing supplies.

The United States, the European Union and Japan have challenged China's quotas in the World Trade Organization as a violation of its free-trade commitments. Beijing has defended its controls as necessary to safeguard a scarce resource and minimize environmental damage from mining.