The World Trade Organisation has announced it will be investigating China’s quotas and tariffs on exported tungsten and molybdenum following complaints by the US, the EU and Japan that it might be breaking global trade rules.

Over 90 percent of the world’s rare earths are produced in China; they are 17 key metallic elements used in defence, renewable energy and electronics worldwide. China has stated that the curbs are designed to protect their shrinking natural resources and the environment.

In July 2010 China reduced domestic output and export quotas by 40 percent, adding pressure to an already strained relationship with the US and Japan. Buyers were forced to reduce usage after prices soared at the start of 2011.

In a recent, similar case the WTO ruled, after investigation, that Chinese export duties and quotas on raw materials used in the heavy metal industry were in violation of global trade rules, in July 2011.

The average export price of Chinese rare earth oxides, a specific type of rare-earths, shot up by 537 percent in 2011 according to data by Bloomberg Government. The same exports dropped over 56 percent in the first five months of this year.

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