Rare Earth News
China relaxes quota on Rare Earths
China, responsible for around 80 percent of the world's production of rare metals, has relaxed the quota restrictions imposed in 2009. This after losing a legal case brought by the World Trade organisation (WTO) on the basis that the export quotas were unjustified after complaints were brought to bear by the US, European Union and Japan among others.
The change, issued by the China Ministry of commerce, was in the trade guidelines for December 2014.
Rare Earths, not really rare at all and are spread all over the earth but the difficulty is in the extraction which can be both time consuming and costly.
"The term Rare Earths is a bit of a misnomer. Rare Earths are not actually that rare at all. With the exception of the radioactive promethium, all the Rare Earth Elements are plentiful in the earth's crust. Cerium, for example, is the 25th most abundant element at 68 parts per million, very similar to copper in fact. What gives them the name Rare Earth Elements is a result of their dispersal in the earth's crust. REE are typically widely dispersed and rarely found in concentrated and economically viable mining concentrates. Hence it was this apparent scarcity that gave them the name rare earths. The first such mineral to be discovered was gadolinite. This is a compound of cerium, yttrium, iron, silicon and other elements. This mineral was first extracted from a mine in the village of Ytterby in Sweden and many of the rare earth elements bear names derived from their location."
Rare Earths are used in many electronic devices today including defence, energy and other high tech products such as mobile phones or cell phones.
Eugene Gholz did an analysis of Chinas position in the Rare Earths arena and concluded that the dominance of China in the world Rare Earths market prompted many other nations to both stock pile and seek out more efficient ways to extract rare earths and the monopoly China has is increasingly slipping out of their hands. This may be what prompted the imposition of a quota system, in 2009 in the first place as an attempt to maintain a tight control over the Chinese Rare earths market.
As in most things, the more rare a commodity is the more effort is expended to crate it and take advantage of that rarity or in this case the market for the minerals.
Eugene Gholz is an associate professor at the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin. He works primarily at the intersection of national security and economic policy, on subjects including innovation, defence management, and U.S. foreign policy.
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Rare Earths Tax
China, it seems, is all set to impose a Rare Earths Elements (REE) Value Added Tax (VAT). In a bid to control and restrict what it considers over production of the rare earth minerals for export, the Chinese government is considering allocating a value added tax to curb apparent smuggling of rare earths out of China.
The percentage of tax envisioned is yet to be determined or at least made public. According to Jia Yinsong, the Director of Rare Earths Office of the Ministry of Industry and Information Technology, "according to the 2011 quota, the export volume for rare earths should have been 18,000 tonnes, but the actual amount was around 36,000 tonnes. This would mean that nearly half of the rare earths production was smuggled."
The Ministry is also looking at strategic buying and selling and even the implementation of a national inventory reserve of rare earths.
A REE trading platform is expected to be set up to regulate the production and export of REE and it is speculated that rare earth companies in Sichuan and Inner Mongolia are likely to be the first companies allocated VAT permits. Possibly due to the fact that REE reserves are more heavily concentrated in Sichuan and inner Mongolia while those in the Fujian, Guangdong and others are relatively scattered.
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