Tag: rare earth

Jamaica discovers rare earth elements

Jamaica could become a major player in the rare-earth market, which is currently dominated by China.

According to Jamaica’s minister of Science, Technology, Energy and Mining, Philip Paulwell, a recent survey carried out by Japanese researchers has found high concentrations of rare-earth elements in bauxite residue. Mind you, the Japanese should be pretty good at finding stuff in the dirt, since Japan doesn’t really have any noteworthy natural resources.

In a report to Jamaica’s Parliament, Paulwell pointed out that the researchers believe Jamaica’s rare-earth elements could be efficiently extracted, indicating that commercial production could be possible. The discovery could potentially turn Jamaica’s economy around.

“The government of Jamaica perceives the extraction of the rare-earth elements that are present in Jamaica to be an exciting new opportunity to earn much needed foreign exchange and create jobs,” Paulwell told lawmakers.

AP reports that Nippon Light Metal, the company behind the survey, has already agreed to invest $3 million in buildings and equipment for the pilot project.

Rare-earth elements produced during the pilot project will be jointly owned by Jamaica and the company, while negotiations on full scale commercialisation are expected at a later date.

China currently dominates the rare-earth market and it has a virtual monopoly on supplying rare-earth elements to manufacturers. In recent years China scaled back exports, causing alarm among foreign companies and governments. In response, the US, EU and Japan filed formal complaints about China’s decision to curtail exports of rare-earth minerals. 

Rare earth shortage prompts supply security action

With tensions over rare earth trade showing no signs of abating, DEFRA says that it is important to raise awareness of the threat to the supply chain.

Last week DEFRA launched a bid to increase recycling of the materials as a means of buffering against further potential price rises, following ongoing battles to increase Chinese quotas.  This followed concern that UK businesses could be affected following supply disruption since 2010.

“We know larger businesses are already aware, and taking action to address risks in their supply chains,” a DEFRA spokesperson told TechEye, “but the smaller businesses or those further down the supply chain may not be aware of the risks for some of the materials they use.

“In the case of SMEs they’re less likely to have considered resource efficiency etc as a way of reducing risk.”

With the ongoing WTO discussions with China over trading of rare earths, DEFRA is hoping for an agreement that will enable easier trading of the minerals.

China produces the overwhelming majority of rare earths, which despite the name are in fact plentiful.  But with China reducing the quotas of REs available to foreign countries, ostensibly for environmental reasons, the EU and US have taken the problem up with the WTO.

DEFRA says it hopes for stability resulting in a trade agreement, in order to help firms which use rare earths in manufacturing.

“We are supportive of the WTO case as we support free trade,” DEFRA says. “However we cannot speculate on what the result of this resolution will be.”

“China owns over 95 percent of world production of RE – we only import it in raw form in very small quantities but it’s contained in many of the products we import.”

“It can be significant for importers in the UK but probably more so for those companies for whom RE is in a component of manufacture.”

UK plans rare earth recycling project

The government is hoping that recycling rare earth materials could protect businesses in the UK from being buffeted by rising costs.

Against a backdrop of EU and US appeals to the World Trade Organisation regarding China’s relative monopoly over the valuable minerals, the government has launched an initiative to bolster security against fluctuating prices.

With China producing the vast majority of rare earths, UK businesses can feel the force of high demand.

In order to tackle this, the Resource Security Action Plan seeks to ensure that rare earths that do enter the UK supply chain, often through consumer electronics, are recycled more effectively.

It is expected that there will be aroud 12 million tonnes of electrical equipment to be dumped in the UK by 2020, much of it coming from PCs and laptops.  Within this mountain of binned electronics the government sees a treasure trove of rare earth materials that could offer protection from fluctuating prices.

Part of the problem is a ”lack of readily available information about resource risks which may affect UK businesses, particularly small and medium-sized enterprises”.

The Department for Environment, Food and Rural Affairs (DEFRA) says that there is not a particular fear that we will run out of rare earth materials anytime soon, but the problem of access, as production slowly moves away from China, remains a concern.

The plan proposes the launch of a “dashboard” to ensure that smaller businesses are aware of supply problems.

The government will also look to support innovative approaches to recycling rare earths, with a £200,000 fund on offer to support efforts by businesses.

DEFRA believes that there are potentially substantial financial benefits to be had in creating businesses which recycle rare earth materials. It will be working with groups such as the Technology Strategy Board to look at opportunities.

Rare earth prices drop as China's grip loosens

A downturn in the demand for electronics products and an increasing shift of production outside China has caused rare earth metal prices to plummet.

For a long time, China has been producing the overwhelming majority of rare earth elements (REEs), used in a variety of applications from consumer electronics devices to eco-friendly technologies.

Now, however, it appears that the Chinese hold over production is loosening and this is in part causing prices to drop as production escalates elsewhere.

China’s near monopoly as a producer led to various situations last year where it was accused of withholding materials – vital to production of many goods including military hardware – through export limits.  As well as riling its Japanese neighbours, EU bureaucrats were up in arms over its supposedly eco-friendly cuts.

It has been the expectation that, with China intent on curtailing the amount of REEs leaving its borders, there would be a reduction in the price of rare earth materials which have been driven skyhigh.

According to an analyst for Beroe Consulting India, Rahul Jalan, prices of rare earths are expected to “to drop to 2009 levels” thanks to an increase in export quotas by China and the availability of new sources that are ready to spring up.

Countries such as Japan have been looking to more reliable sources over the past months, with a lucrative hunt for new reserves even leading to an underwater treasure hunt in the Pacific Ocean offering masses of REEs.

While China accounts for a large proportion of REE production, around 90 percent last year, it does not account for a similar amount of the actual metals.  In the US, for example, production is ramping for Texas Rare Earth Resources Corp, with increase in heavy REE production at its Round Top Mountain mine in Texas.  There are even said to be small amounts in the UK though no real evaluation has begun according to authorities. This expansion and diversification of sources is expected to continue to increase over the coming months and years.

Although price drops are not likely to impact on the price of LCD screens or hybrid cars, it seems that the diversification of supply will be welcomed in various quarters.  While environmental safety might not have been the only reason behind China’s previous export cuts, industry consolidation and less polluting illegal mines may have less impact with China not the only viable source of REEs.

Countries rivalling for rare earths will benefit from a reliable supply, says Paul Lusty, Senior Economic Geologist at the British Geological Survey.

“Diversification of supply of rare earth elements and other so called ‘critical metals’ is vital to ensure security of supply in the future for countries with industrial sectors – particularly emerging low carbon technologies and mobile electronics – dependent on these metals,” he told TechEye.

This in turn will lead to a more reliable market which is less subject to rocketing prices that have been seen in the past, at the mercy of Chinese political whims.

Lusty continued: “Diversification of supply is likely to result in improved market stability as it will increase the total amount of REE material available to the market (potentially leading to oversupply for some elements), thereby reducing the risk of short-term supply shortages which have characterised the market during the last couple and years and exacerbated price volatility.

“Diversification of supply is also likely to lead to a more transparent and stable pricing mechanism/regime for REEs.

“In order to improve market stability it is also important that the balance between production and demand of specific REE is addressed (i.e. shortages of heavy REE are predicted in the short to medium term, with some light REE moving to a position of oversupply).”

However, due to the small amounts of the crucial materials used in electronics, the reduction in costs will not be passed on to consumers: “In terms of the implications of REE prices for the cost of electronic products, REE are incremental inputs to technologies – for example a $5,000 plasma screen may only require $1.5 europium which is critical to performance – therefore it is unlikely that a fall in prices will have a significant impact on the pricing of products.”

Report claims China fibbing over rare earth production

A report on China’s rare earth materials has argued that the country producing far more than has been officially stated – while quota restrictions raise prices for components.

The report by rare earth expert Garth P. Hatch of Technology Metals Research LLC has estimated that China has produced 89,200 metric tonnes of rare earths last year.  This is a substantially higher figure than the official total of 89,200 metric tonnes.

This means that China accounts for even more than the 96 percent of global output that is reported, according to the Wall Street Journal.

Hatch claims that quotas put in place by Chinese authorities to limit production have little actual effect on production, with output “driven by overall demand for these materials, within China and in the rest of the world, not the export quotas.”

This is something echoed by the European Union which has previously expressed to TechEye that the strict quota’s, ostensibly for environmental reasons, are unfairly put in place in a bid to retain its control.

With China having such a tight hold on the valuable earth materials there has been an “explosion” of projects across the world to move production elsewhere.

In the report Technology Metal tracked 381 projects outside China and India, being developed by 244 companies in a further 36 countries.

Australia, South Africa, Alaska, Canada and Sweden are considered to have the leading mines in terms of quality outside of China.

It is expected that as more mines come online global output should rise and reduce reliance on China.  The report estimated global production to hit 163,458 tonnes by 2013 and 327,244 by 2017.

In terms of when specific materials will come into surplus leading to supply in the following time frames:  Lanthanum Oxide: 2012-2013; Cerium Oxide: 2012-2013 ; Neodymium Oxide: 2014; Europium Oxide: 2015-2016; Terbium Oxide: 2015-2016; Dysprosium Oxide: 2017; and Yttrium Oxide: 2016.

According to Technology Metals the elements at most risk in terms of supply are: Dysprosium (used in lasers), Yttrium (used in sensors), Terbium (lasers), Europium (experimental applications) and Neodymium (guidance systems).

And the squeeze on rare earths can already be felt now.  Digitimes has highlighted the price of hard drives heading skyward, with the rise attributed to the Chinese government’s export control policies.

Average selling prices in the retail channel are expected to jump in the third quarter.  Due to increased costs for the rare earths 1TB hard drive will go up by five percent, while 500GB drives will increase by 10 percent.

This is expected to mean that, following the effects of the Japan earthquake on the supply chain, hard drive shipments in 2011 may stay flat year on year for the first time.

Although rare earths would generally constitute only a small portion of hard drive cost, the mammoth increase in price by almost 30 times of the material has hit overall prices.

The optical disk industry is also said to be hit by the China’s export quotas, with the key material TFP causing a price hike, with many second tier manufacturers having apparently stepped out of the market.

In China too there are reports from domestic press that prices are leading to higher costs, with batteries and LEDs being badly affected. 

EU furious at China's rehashed rare earth quota

An EU spokesperson has criticised China’s announcement that it will increase its rare earth quota, labelling it “highly disappointing”.

The world’s largest producer of rare earths – metals used in applications from flatscreens to missiles – has responded to assertions from the World Trade Organisation that it had broken trade rules.

The move came following a ruling by the WTO last week on other raw materials.

China says that its quota for the next sixth months will be up by 97.3 percent, from 7,976 tonnes set for the same period last year to a new quota of 15,738 tonnes. That’s the word from the Ministry of Commerce.

However, the EU has criticised the quota which it says has “no noticeable change in the annual amount of rare earths” that it will actually receive.

EU trade spokesperson John Clancy called the move “highly disappointing” in a statement.

 “A first analysis of China’s rare earth quota announced today shows that there is no noticeable change in the annual amount of rare earth China will allow to be exported to the EU,” Clancy said.

“However, there is a change in number of products covered by the quota: ferro-allows has been added, which in practical terms results in a tightening of a quota as more products need to get hold of the same amount.”

There is a chance that China may well have been cooking the books in a bid to appear like it’s adhering to trade rules

According to statistics TechEye received from John Clancy’s office, the quota is actually down when shown on a yearly scale.

The first tranche of 2011 was 14,446 tonnes, with the second tranche of 15,738 tonnes as announced today by Chinese authorities, meaning an overall figure of 30,184 tonnes.

The annual figure for 2010 was just 30,259 tonnes.

As the new quota included iron alloys containing rare earths, in real terms, the quota was tightened.

A member of John Clancy’s office told TechEye that the EU will seek the removal of the quota altogether, in line with WTO rules.

“We are not very happy as the quota as the amount of rare earths being exported is actually lower,” we are told.

“If you look at the whole year the quota has actually stayed the same, while the inclusion of iron alloys means another third added to the figure.

“We urge China to remove the quota restrictions, which contravene WTO trade rules.

“While it is possible to have restriction for, say, environmental reasons, China is not eligible to do so as it has not reduced its domestic production.”

The EU is now looking at further measures to lift the restrictions completely.

“The action taking place is to raise the issue at all levels. This means at minister level, and we are currently in negotiations with to adhere to the trade laws.

“We are also prepared to takes this to the WTO.”

“However, this essentially means going to court, so we would much rather that China takes more responsibility on the world stage and follows the WTO rules.”

China forces rare earth control in Inner Mongolia

China has consolidated 35 rare earth metal producers into one state-owned firm, giving it a monopoly in the tense Inner Mongolia region.

The Ministry for Industry and Trade said that it will hand control to Baotou Steel Rare-Earth, which will become the only producer of the highly prized materials.

The ‘gold rush’ style clamour for the metals, used in technology ranging from touchscreens and TVs to weapons, has been well documented – with China maintaining a stranglehold over the world’s production.

China is none too shy about throwing its weight around by denying access to other countries, reducing its exports considerably in the past.

According to Dr Damian Tobin, an expert of Chinese business at the Centre for Finance and Management Studies, SOAS, the move will help “ensure the supply for China’s electronics manufacturers; and it will keep the sector off-limits to low cost or illegal, private and foreign investors.”

35 companies in the Inner Mongolia region will be forced to close down by the end of June for Baotou Steel Rare-Earth to take over mining and production.

Inner Mongolia has recently seen major protests by miners, herders and students over the way the area has been turned into a mining powerhouse.

Dr Tobin believes that it is “certainly true” that there has been a “general increase in public unrest over pollution and toxic waste from smelters” in the region, which is responsible for the majority of China’s rare earth production.

“Also from unofficial and illegal mining using low-tech/high polluting mining techniques,” he told TechEye.

“The costs of these problems are increasingly being reflected in high levels of respiratory disease and lung cancers as well as health care costs – unaffordable for the vast majority of workers, particularly since privatisation of health care benefits.

“This concern has reached official level as the costs of environmental damage are increasingly being monetised and enterprises are being hit with environmental levies,” Tobin explained.

“One suspects that it might also be part of a broader effort to increase the costs of entering these sectors, thereby bring order to what appears to have been quite a disorganised but highly strategic sector.”

EU will urge China to free rare earth restrictions

The European Union (EU) will urge China to allow more exports of rare earths at a meeting with Chinese officials this week, according to an EU diplomat.

Countries across the world have been in uproar over China’s decision to limit the exportation of its rare earths, with the country having a near monopoly over the production of the materials used to manufacture a wide range of technology.

The diplomat will discuss worries that have crept up since China decided to lower production, under the pretence of reducing emissions, and EU officials have been monitoring the situation closely.

“We shall be stressing very clearly our concerns on this issue and stressing the importance of keeping that quota open and discussing with the Chinese authorities what their plans are for 2011,” said Matthew Baldwin, the European Commission’s director for market access and industry.

Baldwin told reporters in Beijing that he would meet counterparts at the Chinese Ministry of Commerce to discuss the supply of materials used to produce goods such as hybrid cars and LCD screens.

China boosted metals prices in July by announcing it would cut export quotas for rare earth minerals by 72 percent for the second half of 2010, according to Reuters.

Baldwin noted however that China should not be chastised too quickly for refusing to share precious resources.

“While we are looking with concern at the amounts of rare earths that are issued this year by China, and we’re concerned that they are being reduced in quantities, this is not an issue that is completely China-specific,” Baldwin said. “It’s by no means China’s fault that it has 97 percent of the supply, when it only has 37 percent of the reserves,” he said.

“The international community also needs to look at itself in the mirror and look at what we can do by way of investing more in these important commodities in places such as the United States and Australia.”

Baldwin said it would be important to increase foreign direct investment to China, which currently stands at $71.78 billion, about two percent of the EU’s FDI.

“That’s a percentage we would indeed like to see increase. A number of people have commented to the effect that often the business environment in China is not as easy as it could be,” he added.

One positive note is that China has recently appeared to soften its restrictions, pledging to speed up exports following a spat with Japan, AFP wrote this week.

“Shipments of rare earths started the week before last week at a Tianjing port,” an official of Daido Electronics, a manufacturer and trader of rare earth-related products, told AFP.