{"id":23627,"date":"2015-01-12T22:41:05","date_gmt":"2015-01-12T21:41:05","guid":{"rendered":"http:\/\/www.w-t-w.org\/en\/?p=23627"},"modified":"2015-01-12T22:41:05","modified_gmt":"2015-01-12T21:41:05","slug":"rara-terra-niche-for-china","status":"publish","type":"post","link":"https:\/\/www.w-t-w.org\/en\/rara-terra-niche-for-china\/","title":{"rendered":"Rara Terra Niche for China"},"content":{"rendered":"

Adam Minter writes:\u00a0 Rare earths aren’t the world’s sexiest commodity. The 17 elements are notoriously difficult to extract from\u00a0the ground and have brazenly\u00a0obscure names. (Don’t make the classic rookie mistake of confusing yttrium with yttribium.) But what they lack in branding, they certainly make up for in utility and ubiquity: they\u2019re essential to products as wide-ranging as wind turbines, smartphones, high tech weapon systems and a fishing reels.<\/p>\n

Although\u00a0the United States was once a major supplier of rare earths, China has been the world\u2019s primary source since the 1990s.<\/p>\n

As recently as 2013 China provided 86 pecent of the world’s rare earths supply\u00a0and, especially over the past several years, Chinese officials have made no secret of their plans to use their accumulating monopoly power.<\/p>\n

In 2009, a senior official in Inner Mongolia, home to China\u2019s most productive rare earth mine, explaind how export controls on rare earths (dating back to 1999) were designed \u201cto attract more Chinese and foreign investors into the region.<\/p>\n

When it comes to rare earths, China sees no reason to separate economic goals from political ones.<\/p>\n

By 2011, several foreign users of rare earths had relocaed production to China.\u00a0 Fear and speculation served to drive up prices. For example, cerium — a rare earth often used in aluminum and iron alloys rose from $6 per pound in 2008 to a record of $77 per pound in August 2011.<\/p>\n

Alternatives to Chinese rare earths quickly began cropping up, whether via recycling, new mines, alternative materials, or even smuggling. In July 2010, the Colorado-based Molycorp raised $393.8 million in an IPO, the proceeds of which went to re-opening a rare earths mine it had closed the previous decade.<\/p>\n

By\u00a0mid-2011, the combination of conservation, new mine, and alternative materials\u00a0had produced\u00a0a price crash from which the rare earth market has yet to recover.\u00a0 This\u00a0has\u00a0forced China\u00a0to change course:.<\/p>\n

Rescinding the export quotas\u00a0wasn’t a very significant concession.\u00a0 Demand had fallen off so significantly that the quotas\u00a0had ceased to be an issue. When the WTO ruled in March 2013 that China\u2019s export controls on rare earths and other industrial metals violated its rules, China did not complain.
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China has now consolidated the industry into two state-owned companies.\u00a0 This should address two main problems in China’s market;\u00a0 the proliferation of private mines and wildcatters who can and do supply smugglers.<\/p>\n

It\u2019s an open question whether Chinese industrial policy can maintain the country\u2019s rare earths primacy — and a return to high rare earth prices — via consolidation.\u00a0 Even if China doesn\u2019t dominate rare earth mining, it continues to dominate rare earth processing (the dirty, dangerous, energy-intensive and expensive process of turning rare earths into something useful).<\/p>\n

Even Molycorp, the company that was meant to be America\u2019s great rare earths hope, sends some of its rare earths to China for processing.\u00a0 China\u2019s new rare earth conglomerates — which enjoy state-backing to cover their losses — seem likely to continue their dominance for years to come.<\/p>\n

\"Rare<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Adam Minter writes:\u00a0 Rare earths aren’t the world’s sexiest commodity. The 17 elements are notoriously difficult to extract from\u00a0the ground and have brazenly\u00a0obscure names. (Don’t make the classic rookie mistake of confusing yttrium with yttribium.) But what they lack in … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":22,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[23,13],"tags":[],"class_list":["post-23627","post","type-post","status-publish","format-standard","hentry","category-entrepreneurs","category-finance"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t