China bans rare earth exports to Japan after row-NYT

NEW YORK, Sept 23 (Reuters) - China has banned exports of rare earths to Japan following an escalation of diplomatic tension over the arrest of a Chinese trawler captain near disputed islands, the New York Times reported on Thursday.

The report, which was sourced to unnamed industry experts, said an initial trade embargo on all exports of rare earth minerals would last through the end of this month.

Rare earths traders in China told Reuters they had not heard of any ban. One Japanese trade official told Reuters that he had heard rumours of an embargo, but could not comment further.

Rare earths, a group of 17 metallic elements including yttrium and lanthanum used in small quantities to enhance batteries, computer and weapons systems, and other applications, are generally found together.

China has been the dominant source of rare earths, accounting for 97 percent of world supply in 2009. A 72 percent cut in its export quotas for the second half of 2010 has sent global prices soaring.

This week, Chinese Premier Wen Jiabao threatened retaliatory steps against Japan unless it released the trawler captain, whom Tokyo accuses of ramming with two Japanese coastguard ships.

Beijing has already suspended high-level contacts with Japan over the issue and postponed talks on increasing flights between two countries with close business and trade ties.

Japanese prosecutors have until Sept. 29 to decide whether to bring charges against the captain. (Reporting by Lucy Hornby in BEIJING and Linda Sieg in TOKYO; Writing by John Chalmers; editing by Nopporn Wong-Anan)