Skip to comments.Backlash over China curb on metal exports (environmental rules give China 97% rare earth mineral)
Posted on 09/06/2010 11:33:14 AM PDT by goldendays
Backlash over China curb on metal exports China's draconian export curbs on rare earth minerals needed by the rest of the world for frontier technologies is escalating into a serious diplomatic and trade clash with the United States and other leading powers.
By Ambrose Evans-Pritchard, International Business Editor
Japan's foreign minister Katsuya Okada issued what amounted to a formal protest at top-level meeting with Chinese officials in Beijing over the weekend, saying the sudden cut-off was "affecting the global production chain". It is the latest sign of rising pressure after angry complaints by companies outside China that rely on this family of 17 metals for hybrid cars, mobile phones, superconductors, navigation, and a host of high-tech industries.
Lawrence Daly China's commerce minister Chen Deming said that Beijing would not back down over the export quotas. "Mass-extraction of rare earth will cause great damage to the environment, that's why China has tightened controls," he said, repeating the official line. Beijing set off shockwaves in early July when it announced a 72pc reduction in rare earth exports over the second half of this year.
The country has acquired a near monopoly, with 97pc of global output after under-cutting the rest of the world with Mongolian ores in the 1990s. The sudden cut-off since July has drastically restricted supplies to the rest of world. The last US mine shut 14 years ago, discouraged by tough US environmental rules.
(Excerpt) Read more at telegraph.co.uk ...
"Mass extraction of rare earth will cause great damage to the environment and that's why China has tightened controls over rare earth production, exploration and trade," Chen was quoted by state news agency Xinhua as saying on Saturday.
China issued export quotas for 30,258 tonnes by the end of July, down 40 percent compared to last year, following a nationwide campaign to consolidate the sector and clamp down on illegal production. [ID:nTOE67A03H]
China has been steadily reducing export quotas since 2005 for rare earth elements, which consist of 17 metals used in crucial new green technologies (((like hybrid cars, wind turbines and superconductors, as well as in missile guidance systems and mobile phones.))))
Overseas buyers have expressed concern about China's policies to restrict rare earth exports, which have driven up global prices, but Chen said China had no choice and its own market would also suffer as a consequence.
Rare earths are in increasingly short supply as world demand surges, with industry officials predicting a global shortfall of 30,000 to 50,000 tonnes by 2012. [ID:nTOE66E06N]
China invested heavily in rare earth extraction technology in the 1990s and now controls more than 95 percent of recoverable reserves, mostly in the vast northern region of Inner Mongolia.
It has sought to strengthen its control over the global market, urging its biggest producer, the Inner Mongolia Baotou Steel Rare Earth 6000111.SS to build strategic stockpiles.
China's leading rare earth miners are also discussing setting a unified pricing mechanism in order to boost China's global pricing power. [ID:nTOE67900G] (Reporting by David Stanway, Editing by Ron Popeski)
China is pushing its weight around again.
consist of 17 metals used in crucial new green technologies (((like hybrid cars, wind turbines and superconductors, as well as in missile guidance systems and mobile phones.))))
and they want us to go green are they NUTS?
They got that heavy because we fed them.
Or we have to figure out substitutes. We aren’t stupid people. We can do it.
Guess we’ll have to recycle all our mobile phones and other toys.
How is it that that is the only place on Earth that those minerals can be mined? No other substances are limited to one place, as far as I know.
Yup. Related thread from this morning:
I believe we already have the minerals here but mining them is held up by environmentalists. If we need them badly enough we can get them.
Molycorp will reopen one in California. The RE stocks have doubled in the last year. Molycorp will have a IPO soon.
They think long term - we don't...
It really worked for them this time.
hina corners world ‘rare earth’ supply
Published: Sept. 1, 2010 at 7:02 PM
WASHINGTON, Sept. 1 (UPI) — China’s monopoly on elements used in computer disc drives, electric cars, military weapons and other key products could mean a crisis for the West, experts say.
China’s control of the supply of most of the world’s “rare earth” elements, and its increasingly hard-line stand on limiting exports, could create a supply crisis for the United States and other countries, an article in the magazine Chemical & Engineering News says.
China has cornered the global market on the family of chemical elements used in devices like lasers, computer memory, batteries and superconductors and produces most of the world’s supply, the magazine says. China has been raising prices and restricting exports since 2005, most recently this year.
One U.S. response is a plan to boost domestic supplies. U.S. authorities are reconsidering reopening the largest U.S. rare earth mine at Mountain Pass in Southern California, dormant since 2002.
The U.S. Department of Energy and the Department of Defense are among the government agencies involved in seeking solutions to a possible supply crisis, the magazine says.
U.S. Mining Company Hopes to Break Chinese Monopoly of Rare Minerals
Molycorp Minerals wants to get back into rare earth minerals to challenge China, which now controls 97% of the market.. But reopening its open-pit mine in Mountain Pass, California, could be challenging economically due to the costs and because rare minerals, while in high demand, dont produce big paydays. The mine, which dominated rare earth production into the 1980s, has been closed since 2002. The Chinese government tried to buy the mine in 2005, but was blocked by Congress.
In order to begin unearthing elements needed for green energy technologies, such as wind turbines and batteries for hybrid cars, or for iPods, air bag sensors, MRI machines and military weaponry, Molycorp will have to raise almost $500 million to reopen and expand its California mine. Compare that to the fact that global sales of rare minerals last year were only $1.4 billion. To compete with China, the American company will have to overcome the Asian giants low labor costs and willingness to pollute its local environment to better the bottom-line.
Among the rare earth minerals are:
Bastnasite, used in polish products for mirrors, telescopes and hard drives, among others
Cerium, which has various uses including in the manufacture of pollution-control systems in cars and oil refineries
Lanthanum, used in fuel cells and batteries, could be an important element if electric cars become popular
Neodymium, used in magnets that are critical in the making of cell phones, computers, sound systems, air bags and anti-lock brakes
Gadolinium, used in MRI systems and in the detection of nuclear power plant radiation leaks
Thulium, one of the rares of rare earth elements, can be used to reduce X-ray exposure
I am concerned for the security of our great Nation; not so much because of any threat from without, but because of the insidious forces working from within.
Is the rare earths metals hype overblown? Yes, says Jack Lifton, co-founder of Technology Metals Research, who adds that although the panic over Chinese “hoarding” is misplaced, the U.S.’ dissolution of its domestic rare earth metals production has been equally “foolish.”
Events, Trends, and Issues: Domestic consumption of rare earths in 2009 decreased substantially, based on apparent consumption (derived from 8 months of trade data). Only one of seven rare-earth import categories increased when compared with those of 2008the category mixtures of REOs (except cerium oxide). Prices were generally lower in 2009 compared with those of 2008 for most rare-earth products amid decreased consumption and a declining supply. Consumption for most rare-earth uses in the United States decreased as a consequence of the worldwide economic downturn. The economic downturn lowered consumption of cerium compounds used in automotive catalytic converters and in glass additives and glass-polishing compounds; rare-earth chlorides used in the production of fluid-cracking catalysts used in oil refining; rare-earth compounds used in automotive catalytic converters and many other applications; rare-earth metals and their alloys used in armaments, base-metal alloys, lighter flints, permanent magnets, pyrophoric alloys, and superalloys; yttrium compounds used in color televisions and flat-panel displays, electronic thermometers, fiber optics, lasers, and oxygen sensors; and phosphors for color televisions, electronic thermometers, fluorescent lighting, pigments, superconductors, x-ray-intensifying screens, and other applications. The trend is for a continued increase in the use of rare earths in many applications, especially automotive catalytic converters, permanent magnets, and rechargeable batteries for electric and hybrid vehicles.
The rare-earth separation plant at Mountain Pass, CA, resumed operations in 2007 and continued to operate throughout 2009. Bastnäsite concentrates and other rare-earth intermediates and refined products continued to be sold from mine stocks at Mountain Pass. Exploration for rare earths continued in 2009; however, global economic conditions were not as favorable as in early 2008. Economic assessments continued at Bear Lodge in Wyoming; Diamond Creek in Idaho; Elk Creek in Nebraska; Hoidas Lake in Saskatchewan, Canada; Nechalacho (Thor Lake) in Northwest Territories, Canada; Kangankunde in Malawi; Lemhi Pass in Idaho-Montana; Nolans Project in Northern Territory, Australia; and various other locations around the world. At the Mount Weld rare-earth deposit in Australia, the initial phase of mining of the open pit was completed in June 2008. A total of 773,000 tons of ore was mined at an average grade of 15.4% REO; however, no beneficiation plant existed to process the ore into a rare-earth concentrate. Based on the fine-grained character of the Mt. Weld ore, only 50% recovery of the REO was expected.
some one gave China away in the 1930s
Exactly. As a Founding Father said, “Necessity is the mother of invention.” Or was that Frank Zappa?
Wasn’t there a recent discovery in Afganistan????
We paupers simply will revert to Stone Age existence (with the added indignities of paying enormous taxes, buying government health insurance that provides no benefits, being banned from desirable cave accommodations, and lacking fire on account of its environmental effects. Basically, most Americans will toil day and night to sustain themselves another day on a starvation diet of scavenged vegetables and occasional grain from the garbage bins of the rich, completely exposed to the elements as homeless wanderers sleeping clandestinely in hidden ditches. Our children, if it pleases the government that we allow them birth, will go to government indoctrination centers to deprive them of literacy or numeracy. This is the future and yearning desire of the most successful Americans [or at least from the politicians in the Democrat party].
To me this is the same as California complaining that Texas wont sell them enough energy to prevent blackouts there during the summer. TUFF, build your OWN power plants in California if you want energy, build your own dams in California if you want water.
Maybe if California ran out of water and energy the environmental movement there could be killed once and for all.
But, as long as other states keep enabling them, they will continue to push their environmental agenda of death on the rest of us.
Douglas MacArthur Farewell Speech to Congress
OPEC 2 except with a much less diversified supply base. The left in its zeal to make us less dependent on foreign supplies of oil wants to make us even more dependent on rare earth metals. We are witnessing the predictable result of govenment control of a vital industry. Politicians have no stake in the result except for the next election. Even then, they have a host of scapegoats to blame for their ridiculous policies.
“Mass-extraction of rare earth will cause great damage to the environment, that’s why China has tightened controls,” he said, repeating the official line.
The last US mine shut 14 years ago, discouraged by tough US environmental rules.
LOL Good. We deserve it for caving to enviro natzis and other nuts.
Without rare earth metals, you can't make batteries, electronics, solar cells, electric cars, windmills, nuclear reactors, handcuffs for dissidents...the list is almost endless.
gop and talk radio should jump on this
Refusing to tariff their foreign competition was another major factor. Without a return to protectionism the level of foreign dependency will only continue until we are irreversibly screwed.
Such an obvious move to keep the manufacture of rare-earth based components cheaper in China than anywhere else, and so further encourage Western companies to continue migrating their mfg & associated technology secrets to China.
As for Japan's protests, that's all for show. Japan and China have become quite good buddies as Eamon Fingleton in his book IN THE JAWS OF THE DRAGON has so clearly exposed. If you want to see how East Asia has manipulated free-traders to screw America over since the end of WW2, that's the book to read.
I have high hopes that Beck will publicize this. It leads right to the multiple Democrat/Chinese arrangements that date back to the Clinton years and reach right into the White Hut.
The Michael Steele/John McCain Axis of Apathy and Vichy Bipartisanship, investigate their other half?
Hold not thy breath.
That's right. Forcing American manufacturers to pay even more for rare, raw materials was the only strategic option . . . given that we were shutting our own mines down. /s
They don’t pay the tax - we do.
100% - and those jobs were destroyed by insane union wage demands and endless EPA and other rules which made it too expensive to stay here.
I was a steelworker & I watched it happen.
You can tax foreign products 400% and it will not change a thing - the unfavorable business conditions here remain and unless they are removed, those businesses will never be back.
We have regulated industry right out of America.
And you want US to pay for the tariffs?? Sheesh!
Consider that there are other factors besides the presence of the material in mineable quantities.
I talked with a guy today who is importing frac sand (size graded quartz sand used to prop open the fractures generated during hydrofracking the pay horizons in an oil well). It costs less to ship it halfway around the world and 2000 miles from the nearest port than it does to dig up similar sand in the US.
The difference is in the regulatory hoops one must jump through to dig up sand here. Any mining operation in the US faces the same problems, and that is what shut down the last rare earth mineral mine in the US.
Sadly, at the core of that problem lies another: the people with the expertise needed to extract these minerals are in shorter supply than they used to be, and their diminishing numbers of would-be replacements aren't getting the vital OJT they will need to avoid reinventing the wheel if and when we restore our manufacturing economy.
They were shut down because they could not compete against subsidized foreign competition. Then, like how fallujah-nuker pointed out with regard to American mercury mines, once they were out of the way foreign suppliers were free to raise their prices as much as they wanted. They knew no one would go back to try re-investing in American rare-earth mines with such a high probability they would just be undercut again and lose their investment.
The goods don't get in until the tariff is paid and the check clears. Whether the imported products sell or not. As for American's paying a higher price on imports as a result of tariffs, that has been the way of most of America's 200 years of history. It has been responsible for most of America's non-war related industrial & middle-class growth from 1800-1960. Tariffs, properly applied, make American farming, mining, and mfg the "go-first" source and counter-act foreign competition. If foreign govt intervention continues to compensate for the tariffs, then other tools used before in our history such as import quotas can also be put into effect.
Nobody ever said it was going to be easy. It's going to take about as long to un-screw this country as it took to get it screwed over. If you want to cheap your way to America's future destruction/subjugation then by all means continue supporting keeping our policies the way they are. But I suggest you make sure your children and grand-children learn Chinese. That way they'll have no problem understanding their future Chinese master's orders.
So our tariffs on Chinese rare-earths didn't work, then. And the EPA didn't hamstring the Mountain Pass operation. And the Chinese purchase of Magnequench (and nearly the purchase of Unocal) was inconsequential, according to CFIUS.
Yup, not our government's fault in the slightest. Just "subsidized foreign competition" to blame (in a market that has been reasonably stable over the past couple of decades).
Of course it's our govt's fault! They set the trade policies, signed the trade treaties, and refused to take meaningful action against predatory activities by foreign corporations backed by their govts. Allowing the sale of Magnequench was another sign of how far the Chicom govt has sunk it's talons into our political system.