World Trade Organization judges will probe China's export quotas and tariffs on rare earths, tungsten and molybdenum following complaints by the U.S., the European Union and Japan that the curbs break global commerce rules.
China says the limits are designed to protect dwindling natural resources and the environment. China produces more than 90 percent of the world's rare earths, 17 chemically similar metallic elements used in the defense, renewable energy and electronics industries.
Rare earths became a political issue after China cut domestic output and reduced export quotas in July 2010 by 40 percent, souring ties with major users, including the U.S. and Japan, where buyers reduced usage after prices rose in the first half of 2011.
"China will continue with its efforts to regulate the rare earth industry by cracking down on illegal mining, consolidating producers and other measures," said Wei Chishan, a Shanghai-based analyst at SMM Information & Technology Co., a data provider.
The average Chinese export price of rare earth oxides, a subset of rare earths, soared 537 percent in 2011 from 2010 and was 10 percent higher in the first five months of 2012 than a year earlier, according to data reported by Global Trade Information Services Inc.