China announces shakeup of rare earths industry

February 16, 2011 By JOE McDONALD , AP Business Writer

(AP) -- China plans to tighten control over rare earths producers and restrict output in a five-year development strategy, the Cabinet said Wednesday, amid concern abroad about plans to reduce exports of the exotic minerals used in high-tech goods.

A Cabinet statement promised to "reasonably set annual quotas for production and export" but gave no details. It said the government will tighten environmental controls and block unauthorized production.

China accounts for almost all production of rare earths, a group of 17 minerals that are used in products such as flatscreen TVs and lightweight batteries for mobile phones and . It announced in 2009 that it would reduce exports in what appears to be an effort by to transform China from a bulk supplier of raw ores into a producer of higher-value lightweight magnets and other products.

Wednesday's statement said Beijing will encourage mergers to create more technologically advanced Chinese rare earths producers. It promised to encourage development of technology to create rare earths products.

China will "establish healthy development of the rare earths industry with appropriate development, orderly production, high utilization and technological advancement," the Cabinet said on its website.

The United States, Canada and Australia have rare earths but stopped mining them in the 1990s as lower-cost Chinese supplies became available. China has about 30 percent of rare earths deposits but accounts for about 97 percent of production.

Foreign manufacturers were alarmed when Beijing temporarily blocked rare earths shipments to Japan last year after a Chinese fishing boat captain was detained near disputed islands.

China's Commerce Ministry said exports of rare earths rose 14.5 percent in the first 11 months of last year over the same time a year earlier despite the decision to reduce sales. The ministry gave no explanation of why the government's quota was exceeded.

Surging global demand earths has prompted companies in the United States and Australia to start work on developing or reopening rare earths mines.

Shaken by the threat of supply disruptions, Japan has considered becoming a recycling center and is establishing partnerships with other Asian nations including Vietnam and Mongolia to develop new mines.

Explore further: China says rare earths not a 'bargaining tool'

More information: Chinese Cabinet (in Chinese):


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3.7 / 5 (3) Feb 16, 2011
"The ministry gave no explanation of why the government's quota was exceeded." Answer: Chinese borders are as leaky as those of other countries when the price is right between a buyer and seller.

To the extent prices rise, mining and recycling output elsewhere will also become economically justified, and so this issue is a minor blip in the big picture of the world economy over the coming decade, it seems to me.

I get the general impression that the western media and governments like to beat up on China over this issue, when it is really not much of an issue at all.
3.5 / 5 (4) Feb 16, 2011
I think China is hugely mistaken in thinking that their rare earths are like the Saudi's oil. If they try anything funny, like jacking up prices or restricting supply, the US, Australia, and probably many other nations as well (the US was the biggest rare earth producer in the world before about the late 80s) will start to output again, and they will lose their virtual monopoly forever.
4 / 5 (1) Feb 16, 2011
Take a look at a map. Consider the percentage area currently exploited by industry in the USA and in China. The fact is China has only begun to understand how rich they are, and they want that it remains so for as long as possible. Now study USA's economic model for the national exploitation of its Helium reserves, and ask yourself if China is taking a more mature position. Saudi Oil was an old world problem, this new Global Economy is much smarter as a result of what was learnt during the various oil crises.
not rated yet Feb 17, 2011
I'm going to dig a hole and steal the rare earth metals from beneath their feet!
1 / 5 (2) Feb 17, 2011
The problem is China and beating on them as someone put is what needs to happen. When they start listing there currency properly youll see how things change.

No one can compete in a trade market when one player fixes it.
not rated yet Feb 17, 2011
I have 9 x 1kg ingots of Nd metal if anyone cares to buy them off me for $150 each
5 / 5 (2) Feb 17, 2011
China is trying to control rare earths mining for the same reasons we abandoned it. Rare earth processing in China creates massive pollution. China, for all its faults, is coming to realize that it MUST progress in a sustainable manner. I hope they are successful, as they will create industrial and lifestyle models the rest of the world can copy and adapt to their own circumstance. Politics aside, I wish only success for the chinese people.

Here is a link to the problems of rare earth mining. I hope when we start mining here we can figure out better processing methods.

3.7 / 5 (3) Feb 17, 2011
Bet some of those voices of sympathy and crocodile tears over pollution will disappear as soon as those writers have to pay double for their next television set...or more. Point of fact, we DO need to build that deep space exploration ship to find the rare earths among the easily reachable asteroids, the ones that can be easily mined and returned to our homeworld. This is after all our home system, mankind's manifest destiny to have it; and we should have first call on use of our system's resources. Pollution should be no problem if the earths are mined and processed on site. Just contain the dusts on that asteroid or in the processing ship so as not to be a hazard to the miners or the crew. Processed metals will be really small packages of high value in comparison to the volume of ore usually processed in mining this stuff, so shipping it home will be relatively cheap, especially if using solar sail tech or VASIMR. We DONT go to space with kerosene!
4.3 / 5 (3) Feb 17, 2011
We have plenty of rare earth metals here! They aren't as "rare" as the name would have you believe (just type rare earth metal into wikipedia).
We don't need to go to space to find them, we don't need to steal them from China or anywhere else. There are huge quantities of them distributed all over the earth. China does not actually have any real advantage with rare earths other than that they are willing to tolerate the huge pollution and terrible worker safety (China has the most unsafe mining industry on earth) to sell them at low prices. If they ever try to restrict the supply or jack up the prices, the markets in the US, India, Australia, etc. will respond to the higher prices with more output.

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