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China's Export Quota Cut Likely to Rile Tech Manufacturers

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China's Export Quota Cut Likely to Rile Tech Manufacturers
Published December 28, 2010
Associated Press
FoxNews.com - China's Export Quota Cut Likely to Rile Tech Manufacturers



BEIJING — China said Tuesday it is reducing the amount of rare earths it will export next year by more than 10 percent — likely to be an unpopular move worldwide since the minerals are vital to the manufacture of high-tech products.

China accounts for 97 percent of the global production of rare earths, which are essential to devices as varied as cell phones, computer drives and hybrid cars. Countries were alarmed when Beijing blocked shipments of the minerals to Japan earlier this year amid a dispute over disputed islands.

Concerns over China's grip on rare earths has led countries on a hunt for alternative sources. A number of companies in North America — notably Molycorp Inc. in the U.S. and Thompson Creek Metals Co. in Canada — are hurrying to open or reopen rare earth mines. Two Australian companies are also preparing to mine rare earths.

Numbers released Tuesday by China's Commerce Ministry show export quotas of the rare minerals will be down 11 percent next year as compared to the same period this year. China usually issues a second batch of quotas during the year, and it is not known how the figures will change later in 2011.

The new numbers say China is allocating 14,446 tons of rare earths among 31 companies. China allocated 16,304 tons among 22 companies in the first batch of quotas this year.

China has been reducing export quotas of rare earths over the past several years to cope with growing demand at home. A Commerce Ministry spokesman has also said that China is cutting its exploration, production and exports out of environmental concerns.

Earlier this month, state media reported that China plans to raise duties on some rare earth exports starting next year, but it did not say which minerals would be affected or how much the tax would be.

A state media report Tuesday said China is preparing to set up a rare earths association that would include nearly all of the country's leading rare earth companies, and could help them to coordinate their negotiating position. The report posted on the Sina Corp. portal said the association should be set up in May.

The United States last week threatened to go to the World Trade Organization with its concerns over China and rare earths. When asked for comment during a regular press briefing Tuesday, China Foreign Ministry spokeswoman Jiang Yu declined to answer.

But China has had to address the global concerns numerous times since the spat with Japan.

"China is not using rare earth as a bargaining chip," Wen Jiabao, China's top economic official, told a China-European Union business summit in Brussels in October.
 
Australian rare earth miners look to Europe
Australian miners look to help meet European demand for rare earths in wake of Japan crisis

Mike Corder, Associated Press, On Wednesday December 1, 2010
Australian rare earth miners look to Europe - Yahoo! Finance



THE HAGUE, Netherlands (AP) -- Australian miners of rare earth metals said Wednesday they believe the recent freeze of sales from China to Japan will give their fledgling industry a boost.

Miners were using a rare earths conference in The Hague to discuss cooperation with Europe in the aftermath of the two-month ban on Chinese exports of the valuable metals to Japan's high-tech industries.

China produces more than 90 percent of the global output of rare earths, used in products ranging from cell phones to hybrid car batteries. Beijing imposed a ban in September on sales to resource-poor Japan after a diplomatic spat.

Richard Brescianini of Arafura Resources Ltd. said the crisis "heightened anxiety" about supply alternatives and led to an increase in interest in his company's mining plans.

A number of companies in North America -- notably Molycorp Inc. in the U.S. and Thompson Creek Metals Co. in Canada -- are also hurrying to open or reopen rare earth mines in response to a surge in the prices of many of the minerals.

Arafura is one of two Australian companies getting close to mining rare earths. Brescianini said the company's Nolans Bore mine north of the central city of Alice Springs will likely begin production in late 2013.

Lynas Corporation Ltd.'s executive chairman Nick Curtis said his company's Mount Weld mine in Western Australia's gold mining region is on track to begin production in 2011.

"We will produce a mixed suite of rare earths at 11,000 tons per annum this time next year and at 22,000 tons per annum about a year later," he told The Associated Press on the sidelines of the conference at the Dutch foreign ministry.

Curtis said a major supply deal his company signed last week with Japanese conglomerate Sojitz Corp. may have been helped by uncertainty about Chinese supply.

The deal gave Sojitz exclusive import rights for 9,000 tons a year of Lynas' rare earth metals. Sojitz also agreed to seek up to $250 million in funding from Japan to develop the project.

"We think that's part of the response of the Japanese to the vacuum which China has left in terms of the supply of rare earths to the non-China market," Curtis said. "We think that's positive."

Jaakko Kooroshy, a policy analyst at the Hague Centre for Strategic Studies which helped organize the conference, said it would help forge links between Europe and Australia.

"Europe is looking at diversifying its supply and for that Australia is important, but policy makers have not been dealing with this issue so far," he said, adding that the one-day event would get delegates thinking "how Europeans can help Australians develop resources, how Australians can help Europeans ensure security of supply."

Refining rare earth metals produces toxic waste, and relatively lax environmental regulations in China were one reason the country came to dominate production.

Brescianini said that is changing, and Australia's tough mining and environmental regulations would now give the nation a competitive advantage marketing its rare earths.

"It's a bit like the blood diamond situation ... suddenly it wasn't the right thing to be taking diamonds from particular organizations, particular countries," he said, referring to a backlash against diamonds mined in conflict zones. "Because of the use of rare earth elements in green technologies, people will like a nice clean
 
By what i've read this isn't really a big deal aside from cheap scares.

US and Japan apparently have reserves stockpiled that can last for years, if not decades, which is enough time for other mines, such as American, Canadian, or Australian ones, to make up for the lost capacity.

As it is this will hopefully alleviate even just a bit the massive environmental damage and ongoing desertification occuring in China. China will lose China money and influence, but they aren't really lacking for money now anyways. That said they could regret it later if things turn sour for some reason.

American, Canadian, and Australian mining companies will benefit for obvious reasons, while environmental damage remains to be seen.
 

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