China, the world's stronghold of rare earth elements, on Tuesday came out with its official quota of rare earths exports for the first half of 2012.

China's Ministry of Commerce (MOFCOM) announced Chinese exporters of rare earths elements will be allowed to sell 10,546 tonnes of in the first six months of 2012, a 27 per cent reduction from the quota set for the first half of 2011.

Eleven companies will share the quotas, including seven rare earth producers and four distribution companies, according to a statement on the ministry's Web site. The first batch of quotas includes 9,095 tonnes of light rare earths and 1,451 tonnes of heavy rare earths.

The first-round quotas account for 80 per cent of the full-year volume for 2012, the ministry said.

Beijing imposed an export quota of 30,184 tonnes for 2011, a marginal reduction from 30,258 tonnes in 2010. Bloomberg News calculations estimated the 2012 full-year quota may hit about 31,130 metric tonnes.

"Overall export quotas for the whole of 2012 would remain flat from 2011 in order to guarantee international market demand and keep rare earth supplies basically stable," the MOFCOM said.

MOFCOM likewise said quotas have been allocated for other rare earth producers, including 12,605 tonnes for light rare earths and 1,753 tonnes for heavy rare earths, but will only be distributed once the companies pass environmental inspections. Biggest Chinese rare earths producer Baotou Rare Earth is still awaiting environmental approval.

MOFCOM said the second tranche would bring China's total rare earths exports up by another 20 per cent.

If the pending rare earths producers fail to pass the environmental inspections by July next year, MOFCOM said the quotas will be reallocated but not reduced.

China's total exports of rare earths stood at only 14,750 tonnes from January to November this year, or only 49 per cent of the full-year limit, following a nationwide inspection and crackdown on illegal activities in the sector.

China set export limits on its rare earths along with other mining products such as silver, minor metals and coke to conserve resources and protect the environment. But this created tensions between China and its trading partners including the U.S. and the European Union, saying the world's second-largest economy practices unfair commerce and currency policies.

But analysts have said such policies were designed not only to prioritize supply flow to domestic consumers but to encourage foreign consumers, especially those from high-tech strategic sectors, to relocate operations to China.

Rare earths, a group of 17 elements, are metals widely used in high-tech products ranging from flat-screen televisions to lasers and hybrid cars.

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