China produces 97 percent of global rare earth supplies, giving it a stranglehold over a range of elements used in mobile phone handsets and hybrid car batteries as well as wind turbines and weapons guidance systems.
Yesterday China gave the rest of the world a break, and no this is not some April fool’s joke. This year China’s rare earth elements output will rise 5% to 93,800 tonnes, according to the Land and Resources Ministry. Well a break sort of. Most of the extra production, if not all of it, is likely earmarked for domestic consumption, intended to replace some of the illegal REE mines production, believed to produce about 10,000 tonnes a year before China started closing them down last year.
For the rest of the world the real numbers that count are the export quotas, which China cut by 35% for the first half of 2011 compared to the same period of 2010. How much quota China will set for the second half of 2011 is as yet unknown. Below, how Reuters reported yesterday’s news.
China to cap 2011 rare earth output at 93,800 tonnes
BEIJING | Thu Mar 31, 2011 2:48am EDT
(Reuters) – Dominant producer China will cap its total output of rare earth oxides at 93,800 tonnes this year, up 5 percent from last year, the country’s land and resources ministry said in a statement posted on its website on Thursday.
The statement also said the ministry would not approve any new prospecting or production licenses for rare earths, tungsten or antimony until June 30, 2012.
In October, China is introducing new environmental standards for REE mining and refining. I suspect that those new laws and regulations, if implemented, will have a big impact on next year’s production target. From London, it looks to me, that non domestic prices will just keep moving higher until non Chinese supply become available in depth from about 2013-14 onwards.
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