October 7, 2010 / 8:35 AM / 7 years ago

UPDATE 1-China seeks sustainable rare earths measures-premier

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(adds new deposits in paragraphs 3, 7-8)

BEIJING, Oct 7 (Reuters) - China's measures to control rare earths exports are geared to "sustainable" exploitation of the minerals, Premier Wen Jiabao said in Europe, while pledging not to impose a complete ban on exports.

China has gradually reduced export quotas for rare earths as part of an effort to keep more of the minerals for domestic industry, a policy that has raised alarm among nations with industries dependent on the minerals for high-tech and military applications.

Most rare earths supply comes from China, but attention over the controls has helped fuel financing for new rare earths mines elsewhere in the world. The Xinhua news agency said on Thursday that new deposits had just been discovered in central China.

Wen called for proper control and regulations but said that China will not close the market altogether, according to a Xinhua news agency report late on Wednesday.

"What we pursue is to satisfy not only the domestic demand but also the global demand of rare earth. We should not only stand from the present, but should also look forward to the future," Xinhua quoted Wen as telling the sixth China-EU Business Summit in Brussels on Wednesday.

"If the rare earth minerals were used up, how would the world and China deal with the problem?"

The Xinhua news agency said on Thursday that geologists had located new, untapped rare earths deposits near the city of Shiyan in central China's Hubei province. It has in the past announced new minerals deposits to coincide with international negotiations over a given resource.

The lion's share of China's rare earths reserves are found near Baotou, in Inner Mongolia near the Gobi desert, as well as in the eastern mountainous province of Jiangxi and the southern Guangxi mountains.

European leaders at the summit also pressed Wen on the value of the Chinese currency, and trade and investment concerns including the rare earths export controls, technology theft, counterfeiting and discrimination against foreign firms [ID:nLDE6950A1].

Wen arrived in Italy late on Wednesday, and will meet with Italian leaders on Thursday before travelling to Turkey. (Reporting by Lucy Hornby and Zheng Xiaolu; Editing by Sugita Katyal)

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