Key Takeaway Points
OK, here's what we know so far about China's Rare Earths Industry Development Plan 2009-2015:
- China’s current 35,000 tonnes per annum export quota for rare earths (REO) will be reduced over the next six years, though no quantification of the degree of reduction has yet be provided.
- A total ban on the export of some rare earths materials. These include Dysprosium (Dy), Terbium (Tb) and Yttrium (Yt).
- China will shut down 80 rare earth separation and metal smelting facilities reducing the number of participants from 100 to just 20, to consolidate the industry and improve efficiency.
- Each of these 20 remaining separation and metal producers must produce at least 8,000 tpa REO to maintain a license to operate.
- Authorization for the development of any new rare earths separation facility will be moved away from Provincial Government Agencies and be controlled directly by the Central Governments Ministry of Information and Information Technology.
Rationale & Ramifications
- The centralisation and strict regulation on rare earths production and industry consolidation should concentrate the market structure, placing more power on price structures with fewer agents.
- If China is to make inroads on its environmental standards and reduce pollution levels, then rare earths play a pivotal role. This is a far bigger issue in China than most foreigner realize.
- This is a signal that China’s rare earths are for its own development, and that current recoverable reserves do not meet their own needs.
- Many of Chinas rare earths resources suffer from low recovery of 15% to 40%. Despite many years of focus this recovery rate has not improved and they appear to be at the limit of what is technologically capable.
- Imposition of such dramatic controls is a reflection of the vital strategic nature of rare earths.
Will the world wake up?
(Source: Arafura Resources PR, 18 Aug 09)