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.
Chinese exports were 49
percent of the government-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 ton in the fourth quarter, 15
percent less than in the third quarter, according to data from Shanghai
Steelhome Information.
Lynas Falls
Lynas Corp., developer of
the world’s largest rare earths refinery, fell as much as 4.7 percent to
A$1.23 today in Sydney, set for its biggest decline in almost two weeks.
It was A$1.235 at 1:26 p.m. Sydney time.
China produces at least 90
percent 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.
Export Licenses
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."
Inner Mongolia Baotou Steel
Rare-Earth Hi-Tech Co., the rare earth unit of Baotou Iron & Steel
Group, has yet to receive approval to resume exports, a company spokesman,
who declined to be identified because of company policy, said today by
phone without providing any further details.
Baotou Steel Rare Earth
gained 2.6 percent to 51.50 yuan today in Shanghai trading, beating a 0.4
percent gain in the benchmark Shanghai Composite Index.
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.
Buying Mines
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 A$252
million ($271 million) for a 51.6 percent 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."
China’s full-year export
quota for rare earths this year may be about 31,130 tons, according to
Bloomberg News calculations based on first-round quota figures given by
the commerce ministry on Dec. 27. The quota was 30,184 tons in 2011 and
30,258 tons in 2010.
Wang is helping form a
rare-earth association in China, which is expected to start in the second
quarter and will be funded by industry companies, she said. The
association will help the government’s planning and drafting rules for
the industry, she said.
Source: Bloomberg |