Rare Earths Supply battle heats up. Australia in the firing line?

[Sparty]

The article below gives us an inkling of what is to come... Having been an early investor and commentator on Australian rare earths I think China has some reasonable and valid reasons why they need their Rare Earths for their own manufacturing and I think that as China actually is relatively poor in the REEs on a per capita basis that those reasons are likely to be legitimate.



On the other side Europe, the USA and many Asian nations that depend on China for REEs in order that they can manufacture a wide range of goods that their economies depend on are getting quite vocal. The article below is one of many that seeks to condemn China and in effect says that China is acting as a rare earth crocodile.


Australia having a very large amount of REE resources and some near term producers is right in the middle..... www.AustralianRareEarths.com explores many of the emerging issues and highlights some of the opportunities for Australian investors over the coming years.....

"EU says joint action needed on China rare earth curbs"


Top industrialised nations need to act in concert to challenge China's curbs on rare earths exports and any restrictions by Beijing that could jeopardise manufacturing would be "deplorable", the EU's trade commissioner has said.


Manufacturers also needed to step up efforts to diversify their sourcing of rare earths to reduce reliance on China, which produces around 97% of the world's rare earths, minerals crucial to production of high-tech goods from fibreoptic cables to smartphones and electric cars, Karel De Gucht said.


"I trust that we can come to a sensible understanding with China and to reach that, I think concerted action is very desirable and it is also happening," Commissioner De Gucht told Reuters in an interview after meeting his Australian counterpart.


Meanwhile, four US senators urged President Barack Obama this week to step up the fight against China for what they said was the "hoarding" of rare earths, and Washington has said it could complain to the World Trade Organisation about the restrictions.


China cut export quotas by 40% last year and reduced export quotas for the first half of 2011 by 35% compared to a year earlier due to what it said were environmental concerns over rare earth refining.


But De Gucht said the EU had extended a hand to China to solve its legitimate environmental issues and putting entire industries into jeopardy was not acceptable.


"They have been delivering with great appetite those rare earth materials in the past, I would say at prices which makes mining in other parts of the world quite impossible," De Gucht told Reuters in an interview.


"So if then all of a sudden they would interrupt or squeeze down their deliveries to a point that puts us in jeopardy, I would deplore this very much," De Gucht said.


But he said the dispute highlighted the need to find alternative supplies and he would meet with Australian rare earth firms on Thursday (17 March) to discuss the framework of securing alternative supplies.


He declined to name the companies he was meeting but Lynas Corp is the closest to beginning production and said it expects the first feed of ore into the concentration plant at its Mount Weld rare earths project in Western Australia in the week starting 31 March.


Arafura Resources, which owns the Nolans Bore rare earths mining project, plans to start up production in 2013.


"We certainly have to look at other sources of rare earths," De Gucht said.
He added that an upcoming WTO ruling on China's mineral exports could set the benchmark for how the rare earths dispute will pan out.


"Some time ago we have launched a case before the WTO on a number of minerals, not on rare earths, other ones. We are expecting in the coming days and weeks the result of that case and I think that could influence very much the climate," De Gucht said.


Sources familiar with the case said the WTO considers that China has export restrictions on raw materials that are questionable. Ends.




When we started our www.AustralianRareEarths.com website several years ago it was because we recognized that the REEs were vital to the 21st century's electron economy but I freely admit that we had not realised what a political bun-fight was to come...... But I guess that is part and parcel of what "choke point" investing involves.



Persons associated with this website hold LYC, ALK and GGG.