China, the biggest supplier of rare earths, may almost double exports this year and meet quotas set by the government as lower prices stimulate demand, according to a report in the Sydney Morning Herald.
Chinese exports were 49 per cent of the goverment-alloted quota in the first 11 months of last year because the slowing global economy sapped demand, the Ministry of Commerce said in a Dec. 27 statement. Overseas sales quotas may be virtually unchanged this year at 31,130 metric tons, based on Bloomberg calculations.
“Export quotas may be met this year as overseas demand recovers,” Wang Caifeng, a former official overseeing the rare- earth industry with the Ministry of Industry and Information Technology, said in an interview in Beijing. “High prices last year had deterred purchases and led to inventories depletion. Smuggling also hampered exports through illegal channels.”
Prices of rare earths have tumbled since the third quarter as consumers including makers of electric cars and wind turbines sought to reduce use. The average price of lanthanum oxide, a rare earth used in rechargeable batteries and refining catalysts, was 129,167 yuan ($20,508) a metric ton in the fourth quarter, 15 per cent less than in the third quarter, according to data from Shanghai Steelhome Information.
China produces at least 90 per cent of the world’s rare earths, used in Boeing Co. helicopter blades and Toyota Motor Corp. hybrid cars.
The nation has curbed output and exports of rare earths since 2009, when quotas were set at 50,145 tons, as part of its wider move to conserve mining resources and protect the environment.
Slashing exports boosted prices and sparked concern among overseas users such as consumers about access to supplies. China halted some mines last year, seeking to curb overcapacity, cut illegal mining and improve environmental standards.
The Chinese government allocated 10,546 tons of first-round export quotas to nine companies, including China Minmetals Corp. and Sinosteel Corp., that have met the government’s environment protection standards, the ministry said.
Another 14,358 tons may be granted to 17 other companies, including Baotou Iron & Steel Group, China’s biggest producer, that was not granted an export license for this year, it said. Baotou is one of 21 smelters waiting for approval, it said.
“Baotou will be able to get the license to resume exports this year,” Wang said. “It’s just a matter of time as it takes a while for the government to review the company’s environmental improvement.”
China is encouraging its companies to develop rare earth mines abroad to help ease pressure on domestic producers, Wang said. China has the technical expertise and human resources required by overseas company in mine development and processing, she said.
Australia’s Lynas Corp. and Greenwood Village, Colorado-based Molycorp Inc. should cooperate with China, including allowing Chinese groups to buy stakes in their mines, said Wang, who’s overseen the industry for more than 30 years.
Australia blocked China’s bid in 2009 to gain control of the world’s richest rare earth deposit amid concern it would threaten supply to non-Chinese buyers.
State-owned China Non-Ferrous Metal Mining (Group) Co. in May 2009 offered $252 million for a 51.6 per cent stake in Lynas Corp., which needed cash to resume development of the Mount Weld rare earth mine in Western Australia.
“It was a loss to Australia, not to China,” Wang said, “They should be more open-minded.” More at Sydney Morning Herald
