The Chinese government is awarding state funds for interest-free loans for the strategic buying of heavy rare earth oxides to stockpile because concerns that reserves are running low, a state-owned newspaper reported.
Jia Yinsong, head of the rare earth department at China's Ministry of Industry and Information Technology, said Beijing has identified 11 rare earth mining zones in order to carry out the stockpiling of the nation's rare earths.
China Securities Journal said current low rare earths prices had prompted the start of China's strategic buying and the resources could be used to address future rare earths resources shortfalls. The oxides under consideration for stockpiling include Terbium, dysprosium, europium, and yttrium.
In a statement Wednesday, Halifax, Nova Scotia-based Ucore Rare Metals said, "It is expected that rare earth producers Chalco, China Minmetal, and Baotou Steel Rare Earth are to receive interest free loans in conjunction with the creation of the stockpile."
Last year China announced its intentions to build a rare earths strategic reserve, but did not reveal when it would do so.
In a statement released Thursday, the U.S. Magnetic Materials Association (USMMA) said it viewed China's stockpiling announcement "as further confirmation of the need for a non-China dependent, domestic and allied nation rare earth supply chain.
"China's prospective stockpile of some of the most critically threatened strategic metals to the US is a watershed event that will likely accelerate the development of domestic initiative to protect the supply of these materials," said Jim McKenzie, Ucore CEO.
On June 27, U.S. Trade Representative Ron Kirk announced the U.S. had asked for the establishment of a World Trade Organization dispute settlement panel to decide the U.S. claims regarding "China's unfair export restraints on rare earths, tungsten and molybdenum." The European Union and Japan joined in the U.S. request for the WTO panel.
In March, the EU, U.S. and Japan asked the WTO to examine China's restriction of exports on rare earths, asserting Beijing is using quotas and caps to limit REE exports to benefit China's domestic industries.