BRUSSELS - EUROPEAN Union trade commissioner Karel Gucht on Tuesday urged global partners to diversify mining sources for prized rare earths as a battle with China deepened over scarce supplies.

Mr Gucht spoke out as a row that began between China and Japan over access to 17 essential minerals used in high-tech products ranging from flat-screen televisions to hybrid cars threatened to turn into a worldwide protectionist rallying cry.

'This is going to become a very, very difficult problem if we dont't find a way out,' Mr Gucht told an EU-China conference in Brussels.

He insisted that a string of mine closures elsewhere was 'very closely linked to the price policy of rare earths by China' and stressed: 'I think we should come to a global understanding.'

The United States and Australia have 15 and five per cent respectively of global reserves, but stopped mining them mainly because of cheaper Chinese competition.

'It cannot be a (Chinese) tool in industrial policy, because that would have very large ramifications,' Mr Gucht warned, fresh from an EU-China summit that broke down amid fears of a 'war' on currency exchanges. 'It's obvious that we cannot continue being completely dependent on China,' he underlined.

Time to look beyond China