World Leaders Seek REE Export Quota Changes
Source: Resource Investing News, Michael Montgomery (9/9/10)
"The request fell on deaf ears."
The Chinese ministers cite a few reasons behind the export cuts. Environmental degradation is the one most used, as the extraction of these elements involves a rather deleterious chemical process. After years of producing REEs at great cost to their environments, China decided to cut back on REE mineral extraction and begin cleaning up mining sites.
The second concern is price. China was able to undercut all other global mining operations due to its lack of environmental concern. The low price of the oxides they could produce put operations in the U.S. out of business. Now, Chinese domestic REE producers want some rewards.
The price for cerium, used in LCD displays, has risen sharply to $40–$50/kg., up from a mere $5–$6 one year ago.
The third concern is China's use of its own natural resources. An estimated two-thirds of the nation's REE production is used domestically. As China's population becomes wealthier, its appetite for many of the high-tech products utilizing rare earths also grows. China's desire to transform its economy into a high-wage earning, high-tech economy is driving its domestic REE hoard.
"With China seeking to shift its industry to the manufacture of higher-value goods needed for a green industrial transformation, it will increasingly require the lion's share of its own rare-earth production to satisfy domestic demand," stated Reinhard Butikofer, for The New York Times.
By controlling the resources vital to a technological world, China is in the driver seat for its own future.