China Now Planning to Boost REE Exports and Output
Source: Shivom Seth, Mineweb (2/27/12)
"China is set to double exports of rare earths in 2012 from its drastically lower 2011 levels in order to meet government quotas. Though the overseas sales quota is expected to remain more or less unchanged in 2012, the Asian powerhouse has been curbing exports since 2009."
In 2011, China set export quotas amounting to 30,184 tons. However, its actual rare earth exports totaled only 14,750 tons during the first 11 months of 2011, accounting for only 49% of the total quota, according to a statement from the Ministry of Commerce.
This year, the country will be able to meet its export quotas to the full potential as demand from the overseas market appears to have recovered, an official told a newswire agency. China accounts for nearly 90% of the global rare earth supply, but its reserves only account for about one third of the world's total.
Besides, this, China has also outlined a plan to speed up the development of the country's rare earths industry ‘til 2015, in a move that would help maintain rare earth prices, analysts have noted. The plan is meant to fast track the development of its domestic downstream industries that use rare earths, according to the country's Ministry of Industry and Information Technology.
Efforts to develop rare earth manufacturing will focus on cities including Beijing, Baotou in the Inner Mongolia Autonomous Region and Ganzhou in Jiangxi Province.
The plan aims to promote the application rate of production technologies for rare earth functional materials to 70% in the country's high tech industries by 2015. The government has also detailed goals to increase the output capacity for rare earth permanent magnet materials by 20,000 tons a year and that of rare earth hydrogen containing alloy powder by 15,000 tons a year.
As if in tandem, China's benchmark stock index rose to a 3-month high. Inner Mongolia Baotou Steel Rare Earth Hi Tech Company climbed the highest in five months on prospects that China may double rare earth exports this year. Agency reports said Baotou Steel, China's biggest producer of rare earth, jumped 5.6%, while competitor Xiamen Tungsten Company rose 2.5%.
Analysts tracking the minerals said price of certain rare earths have slid, which in turn has stimulated demand. The average price of lanthanum oxide was quoted at $20,508 a metric ton in the fourth quarter, 15% lower than in the third quarter.
International prices for some light rare earths, like cerium and lanthanum, used in the polishing of flat screen televisions and the refining of oil respectively, have fallen as much as two thirds since August 2011, said analysts. Moreover, prices have declined by roughly one third for highly magnetic rare earths, like neodymium, needed for products like smartphones, computers and large wind turbines, they added.
In a bid to promote healthy development of the industry, the country had suspended the issuance of new licenses for prospecting and mining and adopted production caps, export quotas and stringent environmental standards.
Decades of excessive mining have resulted in extensive environmental damage. Reports indicate that the Chinese government has allocated 10,546 tons of export quotas to nine companies that have met the government's environment protection standards. The companies include China Minmetals Corporation and Sinosteel Corporation, among others. - Shivom Seth, Mineweb