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View Full Version : China announces another Rare Earth tax hike


Sparty
12-15-2010, 05:57 AM
The just released news by China Daily (http://www.cdeclips.com/en/business/Export_tax_to_be_raised_on_rare_earth/fullstory_56952.html) that China will again raise export taxes on Rare Earths in 2011 will probably be met with another outcry with many claiming it to be a plot to weaken the West.

However China is on a per capita basis much, in fact very much, poorer than Australia in the Rare Earth elements.

That the US's military is highly dependent on the REEs is not China's fault and that the US closed down its own industry for the refining of the rare earths leaving itself open to a degradation of its abilities is again not China's fault. And while we can feel sorry for the Japanese , Koreans and other nations that require REE metals and oxides to make their products it is not China's fault that the countries with large amounts of REEs have chosen the slow lane when it comes to mining and refining them. In my view the Australian Govt. is more at fault than most..... we could have and should have done a lot more and this doesn't just apply to our vast rare earth element resources. If it weren't for Galaxy Resources (http://www.australian-shares.com/mining/GXY) we wouldn't be in the race to supply refined Lithium metal and despite Australia having over a third of the world's economic uranium resources where is our cradle to grave uranium industry? (Outsourcing it to Russia is a very poor option)

But back to the REEs and China's increased tax on exports:
China has around 30% of the world's economic REE resources. Australian companies have a comparable amount.

It is not common knowledge that Australian companies control a large proportion of the world's proven Rare Earth Elements Resources and may just have more than China. The USA and Canada also have significant light rare earth resources and recently countries such as Afghanistan have been mentioned.

What Australia, the USA and Canada do not have is the ability to process the rare earth elements into the refined metals and it is the refined metals that are the "choke" point.


Australia's Lynas Corp (http://www.australian-shares.com/mining/LYC) ASX: LYC NASDAQ: LYSCF, is now mining one of the world's riches REE deposits at MT Weld in Western Australia and is also currently building a REE refinery to separate and purify Rare Earth Oxides (REO) and metals. The separated and purified REO's are the actual products used in the 21st century electron economy and Lynas is on track to be delivering these to customers in late 2011.

"This will make Lynas the first non-China based player to produce new refined REE metals supplies into the market place, with at least a couple of years before the USA or Canadian companies can compete."


Australia also has several other companies on the verge of mining. Alkane Resources (http://www.australian-shares.com/mining/ALK) (ASX:ALK) has one of the world's richest heavy rare earth deposit at Dubbo in New South Wales and Arufura Resources (http://www.australian-shares.com/mining/ARU) (ASX: ARU) has a large rich deposit in the Northern Territory.


The world's largest proven REE deposit is owned by Australia's Greenland Energy and Minerals (http://www.australian-shares.com/mining/GGG) (ASX: GGG) a very small by market cap company that owns the giant Greenland deposit at Kvanefjeld.


Australia has another dozen or so companies with some REEs. (http://www.australianrareearths.com/rare-earth-stocks.html) The ones I have mentioned above have "proven" JORC compliant resources. Interestingly the market caps of many of Australia's REE companies with proven resources is still small and so it is an investors paradise.

You can read about Australian Rare Earths at http://www.australianrareearths.com. (http://www.australianrareearths.com./)

Recent publications from China suggest that they have only around 30% of the world's REE deposits and that on a per capita base are actually relatively poor in them. Mining the REEs (especially the clay based REEs) has also caused a lot of life threatening pollution.

China also has much higher amounts of the light Rare Earths, whereas Australian companies have large amounts of the heavy Rare Earths that are used in the powerful magnets for hard drives, hybrid cars and wind turbines.

http://www.australianrareearths.com/images/alk.gif
The image shows at a glance who has what outside of China... The resource on the left is owned by Australia's GGG (http://www.australian-shares.com/mining/GGG). and information about World wide reserves, resources and current issues can be found here http://www.australianrareearths.com/current-issues.html


Whatever else Australia is amazingly rich in the rare earths and other specialty metals such as Lithium (http://www.australian-lithium.com (http://www.australian-lithium.com/)) and Uranium (http://www.australianuranium.com.au (http://www.australianuranium.com.au/)).

Lynas has done the almost un-heard of (in Australia) by developing a vertically integrated supply chain that takes a substance from out of the ground to a purified end-point for sale to overseas buyers.... Australia the lucky energy country.