Comments on: Chinese Rare-Earth Mining Quotas For 2012

By: Venky

Venky — Sat, 16 Jun 2012 22:24:01 +0000

Interesting article.

We all know about 97% of REE is from China and Chinese Govt is taking full account & control of REE exports today.

Where the world is heading now!

Most of the high tech electronic components needs the REE but clear shortage of supply vs demand.

I think WTO and related associations has to do something b4 we end up in supply.

Thanks for updates and sharing

By: mark

mark — Thu, 24 May 2012 22:41:02 +0000

i will like us to have a business deal with my government on coal mining

By: Barry Murray

Barry Murray — Tue, 15 May 2012 23:33:14 +0000

So here is the result of California going bankrupt through capitalistic bureaucrat stupidity via a crusading District Attorney saving the World at Mountain Pass, CA, and Congressmen protecting Idaho through Geological Survey Bulletin 1304.

Sorry. You financial mining industry experts, as explained on MiningMagazines.com really aren’t that bright.

By: Marc

Marc — Mon, 14 May 2012 08:14:38 +0000

Dear Gareth,

Many thanks for your work.
Do you know where can I get more information about this new invoicing system for RE ?

Regards,
Marc

By: Pan

Pan — Mon, 14 May 2012 00:40:13 +0000

Dear Gareth,
Thank for your professional informations of rare earth. In my opinion, both government and enterprises in China have taken measures to exploit the rare earth reasonably. The global market will get more competitive.

By: Gareth Hatch

Gareth Hatch — Sun, 13 May 2012 23:46:50 +0000

@Henry LEWY: Thanks for your comments.

@Arlen Gregorio: The mining quotas are not broken down by individual rare-earth element, no. However, the quotas are allocated on a “light-rare-earth” or “ionic-clay” basis, with specific provinces and regions being allocated quota within these categories, on the basis of the type of deposits found within their borders.

Specifically Guangxi, Hunan, Inner Mongolia, Shandong and Sichuan are usually allocated light-rare-earth mining quotas; Fujian, Guangdong, Jiangxi and Yunnan are allocated ionic clay mining quotas. So if you look at the totals for 2011, 80,400 t of light-rare-earth mining quotas were issued, and 13,400 t of ionic clay mining quotas (do note that there are typically small amounts of heavy rare earths in light-rare-earth minerals, and significant proportions of light rare-earth elements in ionic clay deposits).

It can be argued that the constraints in the supply of critical rare earths started in the latter half of 2010, when export prices began to increase, and despite the peak last summer and the subsequent decline in prices, sourcing of such materials remains tight, especially heavy critical rare earths. Neodymium and dysprosium usage saw some decline last year because of the effects of the high prices, but as prices head towards where they were at the beginning of 2010, one can expect demand to pick up again (assuming we don’t get hit with another global financial crisis, or GFC as my Australian friends like to call it).

@bz1516: much of the large inventories consists of lanthanum and cerium, because it was still being churned out last year despite the dramatic demand destruction as a result of the escalating prices. Chinese sources tell me that there are significant quantities of other rare earths warehoused too.

When this new invoicing system kicks in, a higher degree of provenance for rare-earth products will be expected, and this means there are / will be some traders who are trying to get rid of materials with, shall we say, less comprehensive paper work…

By: bz1516

bz1516 — Sun, 13 May 2012 23:05:13 +0000

An important piece to the puzzle. Perhaps the large inventory of finished product is the source of price weakness?

By: Arlen Gregorio

Arlen Gregorio — Sun, 13 May 2012 22:14:22 +0000

Gareth-
You say:
“There is almost certainly significant excessive inventory of all finished rare earths in China at present”
For some time I have been seeing speculation that the availability of the more critical rare earths may become seriously constrained, to the point that perhaps even domestic Chinese manufacturers might have trouble obtaining sufficient supplies of dysprosium, terbium and others.
I assume the quotas issued by MLR for H1 2012 do not contain breakdowns by metal type, or you would have shown them.
Is there anything in the information you have seen which would give you a clue about how the quotas will work in that regard?
Also, do you have any sense of when, if ever, the market might start moving toward constraints in supplies of some of the critical rare earth metals?
Thank you again for another excellent article.
TMR continues at the top of my list of investment research resources.
Arlen

By: Henry LEWY

Henry LEWY — Sun, 13 May 2012 20:22:10 +0000

Dear Gareth,
many thanks for new Information of today. I appreciate your very informative work.
Best Regards

Henry

By: Gareth Hatch

Gareth Hatch — Sun, 13 May 2012 19:51:22 +0000

@Nevada George: thank you for your comments. @bbqdays: As mentioned in a recent article that I wrote on the WTO complaint, China is likely to cite certain exceptions to the usual rules of the WTO, which allow countries to implement measures that deviate from those rules under certain circumstances. The general expectation, however, is that such measures not discriminate between domestic and foreign participants, nor should they be a disguised attempt to interfere with international trade. Export quotas, by their very nature, clearly discriminate against foreign participants in the market. If, however, they were used in conjunction with measures such as reduced mining quotas, which would affect all market participants, then China's case for using such exceptions might be strengthened.