Strategic Metal Report

Minor Metals Summit 2010

 

Coverage from the Asianmetal.com Minor Metals Summit 2010 - Sept. 27-29 (Shanghai, China)

 

Measuring Chinese Rare Earth Export Restrictions

China’s rare earth element export restrictions are not limited to the oft-cited export quotas, but also include various export taxes. The OECD has recently published reports on global export restrictions of strategic materials and their impact on trade and global supply (link below). The following graph uses data derived from the most recent report in order to measure increasing export restrictions as well as global dependence on Chinese rare earth production.

Minor & Strategic Metal Conferences 2010

Two upcoming conferences will provide some highly demanded insight into the minor and strategic metal industries, including rare earths. The first of these is AsianMetal.com’s Minor Metals Summit 2010, which is being hosted in Shanghai this year between September 27th and 29th. The headline speaker for the Minor Metals Summit is Chinese economist Lang Xianping. The second, organized by Metal-Pages.com, is Minor Metals & Rare Earths 2010 and will be held between October 18th and 21st in Xiamen, China. This conference will provide more coverage of the rare earth industry and scheduled presentations include speakers from the Chinese Ministry of Commerce, as well as both major Chinese and international producers. (Details below)

SMI Ltd. will have a presence at both conferences, and we will do our best to provide updates and coverage of the presentations here on SM Report. Looking at the presenters and topics to be covered, there is a lot to look forward to. Here are some that we have circled on our schedule:

• “Gallium Market Development in the New Economical Background” - Chen Feng, General Manager, Beijing Jiya Semiconductor Material Co.,Ltd. 
• “Analysis on Current Situation of Global Tantalite Resource Exploitation and Chinese Tantalum Development Environment” - Ningxia Non-ferrous Metals Smelter
• “Meeting Global Rare Earth Demand:  Opportunities for East-West Cooperation". - Mark Smith, CEO, Molycorp Inc., USA
• "Recycling -  "Exploring the challenges in closing the loop for Special Metals" covering In, Se, Ga and Te. - Kris Van den Broeck, Umicore Precious Metals Refining, Belgium
• "Chinese antimony trioxide production, consumption and the outlook,” - Liu Chun, Director, Guangxi Youngsun Metals & Chemicals Corp. Ltd.

Environmental Defense of Rare Earth Export Quotas May Invite WTO Action

Also published on RareMetalBlog.com

The China-Japan economic dialogue concluded last weekend in Beijing with Japan raising concerns over the impact of China's rare earth export restrictions on the global economy. As noted in the London REE report on Tuesday, the complaints were dismissed by China’s Minister of Commerce Chen Daming, who reiterated that decisions to limit production and export of rare earths are based on concerns about environmental protection and not contradictory to WTO rules. It is looking increasingly likely that we will soon find out whether the WTO agrees with China’s claims.

In my previous post, I discussed the relationship between the raw materials case currently under review by a WTO dispute settlement panel and the current rare earth situation. In the raw materials case before the WTO, China has also defended its export controls by claiming that they are necessary to protect against environmental degradation. As China further entrenches its defense of rare earth export controls behind environmental principles, the forthcoming decision on China’s raw materials export controls becomes ever more relevant.

Most outside of China believe that the environmental protection argument holds little credibility in the defense of export controls, which only serve to create distinct price advantages for domestic end-users and manufacturers. However, production controls, which limit the annual amount of rare earth production and are also currently applied by the Chinese government, do not create the same unequal economic conditions as export controls and have been recognized in other industries as acceptable under the WTO. Assuming the dispute settlement panel does find China’s export controls to not be in accord with WTO rules, it is very likely that China will shift towards greater reliance on production controls. Such a change would satisfy the WTO by creating a more level playing field for domestic and international purchasers and allow China to escape financial penalties or the imposition of countervailing duties. It would also allow China to maintain control over the primary supply and global prices for many raw materials, including rare earths. However, without WTO involvement and the threat of financial penalties against Chinese industries, international manufacturers will have to continue to compete against manufacturers with subsidized raw material and rare earth resources.