I arrived in Perth at 6 AM yesterday for the Uranium Conference, where I'll be discussing the REE market. One of the topics that I will be referencing is the rare earth black market. You may enjoy some interesting facts and research highlights this morning to kick off your week:
- According to the China's whitepaper on rare earth elements (June 2012): "By way of special rectification campaigns, more than 600 cases of illegal prospecting and mining were investigated and rectified, more than 100 cases were placed on file for further action, and 13 mines and 76 smelting and separation enterprises were ordered to cease production for rectification. In this way, the trend of illegal mining and production has been reversed."
- A Reuters article titled, Q&A-Will China's rare earths sector crackdown work? (August 20, 2011) notes, "China's dominant role in global production has created incentives for miners to flout rules, especially as global demand surges, with illegal production and smuggling still rampant."
- To circumvent export quotas rare earths are smuggled outside of China. This poses a concern for China as they try to limit the amount of rare earths that enter the market. Many argue that the REE black market is the driver behind China's push to consolidate its rare earth mining industry.
- Illegal REE mining and processing is said to be more prevalent with China's smaller REE companies as they often resort to illegal measures after being denied a license to export. Also, entrepreneurs wanting to make money may ignore laws and smuggle REE materials that are usually labeled as a different product.
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