LYC: rare earth minerals the next big thing

[Gasbox]

Nth American RE stocks are crashing due to China releasing RE for export today. Their fall is unrelated to what happened earlier this week.

The Chinese govt is resuming shipments to Europe, the US and Japan with the embargo lifted although shipments to Japan still face "futher scrutiny".
Shipments to Japan have been blocked since Sep 21st, the US and Europe since Oct 18th.

http://www.steel.org/AM/Template.cfm...ONTENTID=40993

[stevo1]

The Chinese govt is resuming shipments to Europe, the US and Japan with the embargo lifted although shipments to Japan still face "futher scrutiny".
Shipments to Japan have been blocked since Sep 21st, the US and Europe since Oct 18th.

http://www.steel.org/AM/Template.cfm...ONTENTID=40993

Is this the unofficial positon of Chinese policy or just the journo 's opinion ?(keeping in mind the freedom of the press)

Here is the full article

Opinion Rare as it is
(China Daily)
Updated: 2010-10-29 13:31 Comments(0) PrintMail Large Medium Small

Attempts by some rich countries to challenge China's decision to enhance control and regulation over rare earth minerals is the latest evidence of astounding unfairness in the current global economic and trade order.

If the world economy is to embrace a sustainable recovery, no country should stand in the way of China properly pricing resources as scarce as rare earths.

The Chinese government made it clear again on Thursday that it will not use its current dominance of global rare earth supplies as a bargaining tool. Such an official statement is meant to ease unjustified international concerns that China may be using its rare earth exports as an economic and political lever.

China enjoyed little appreciation over the past two decades when it was burdened with the world's demand for the 17 elements called rare earths. With about one third of the world's total reserves, China has satisfied more than 90 percent of the world's need for rare earth elements at such an abnormally low price that it belied the name.

Yet, even more absurd, while other countries of large reserves like the United States have contributed virtually nothing to global supply in the past decade, they are demanding China, the largest producer of the elements, to keep exporting with little say over the price and quantity of exports.

It is no secret that regulatory problems in the domestic industry must have contributed to this abnormal trade.


Related readings:
China will not use rare earth as bargaining chip
China hopes to co-op on rare earth utilization
China to reduce rare earth export quotas
China's rare earth rules meet int'l regulations



Hence, when China decided to strengthen its regulatory measures on the exploration, production and export of rare earths in line with international practice and World Trade Organization rules, those import countries that have benefited from China's cheap export of rare earth materials for a long time should not be too surprised.

Given the severe environmental problems associated with their exploration, as well as their increasing value as essential elements in new energy technologies, it is all too natural that rare earths will become much dearer than before.

While China retains its position as the largest exporter of rare earth materials, no one should expect the country to continue to meet most of the world's demand, because that is simply unsustainable given that it has only one third of the world's reserves.

Besides, if the international community is really serious about sustainable development, China's efforts to exercise control and regulation over its rare earth industry should be a welcome step.

The long-term benefit of pricing resources appropriately is far more important to sustainable development around the world than the short-term gains that importers can reap from cheap rare earth elements.

But international efforts to fix the global economic and trade order in line with a sustainable future, unfortunately, remain rare.
http://www.chinadaily.com.cn/busines...t_11476830.htm

[Gasbox]

Judging from opeing paragraph of the article the unofficial Chinese policy.
Interesting the China Daily article makes it out as though Chine has been "burdened" with supplying rare earths as opposed to flooding the market and pricing out any competition.
Also it describes the rare earths as "scarce" in spite of The Baotou region alone belived to be holding over 40 millions tons so at current global rates of mining (chinas current rates) this mine with last 400 years.

[stevo1]

Judging from opeing paragraph of the article the unofficial Chinese policy.
Interesting the China Daily article makes it out as though Chine has been "burdened" with supplying rare earths as opposed to flooding the market and pricing out any competition.
Also it describes the rare earths as "scarce" in spite of The Baotou region alone belived to be holding over 40 millions tons so at current global rates of mining (chinas current rates) this mine with last 400 years.

HI Gasbox,

Where did you get that 40 million ton figure from?this article in the China.org.cn quote

"The near completion of the Baotou Steel Rare-Earth integration plan in northern China is a strategic step. Thus, it has to move toward the south to expand its stance," said Liu Minda, an analyst at Huatai Securities, adding that Ganzhou is a good start for the company.

Ganzhou has verified reserves of 2.89 million tons of ion-absorbed-type rare earth elements, accounting for 40 percent of the nation's total."

full article here :http://www.china.org.cn/business/201...t_20635525.htm

[Gasbox]

The 40 million figure for Baotou will include the ion absorbed (heavy/medium) rare earths and light rare earths. Looking back at it I imagine the China Daily article is describing the heavy/medium rare earths as scarce although it doesn't say specifically.

"China's verified reserves of ion-absorbed-type rare earth stood at 8 million tons in 2008, while reserves of light rare earth totaled 50 to 60 million, according to data from the Ministry of Land and Resources."

http://blogs.forbes.com/gadyepstein/...echannelforbes - Article describing Baotou's reserves.

[Gasbox]

Interesting development on the Japanese plans to secure steady supplys of rare earths. Small mine compared to Lynas however who could supply annually 7 times as much as the Lai Chau deposit.

Japan believes it has secured the mining rights for a mine in Lai Chau province of northwestern Vietnam, another Japanese government official said.
Japan's Sojitz Corp and Toyota Tsusho Corp and a Vietnamese firm are conducting a feasibility study at a deposit in Lai Chau, and the project could produce 3,000 metric tons of rare earth minerals a year or about 10 percent of annual demand in Japan, a Japanese trade ministry official said.

http://www.reuters.com/article/idUSTRE69U05F20101031

[stevo1]

this is taken from hotcopper and attributable to noelgulliver
The reality is Lynas has already pulled initial amounts from the ground at Mt Weld for some time now - and delivered nothing. So mining is not the problem , rather it is the processing and that takes time & money - lots of both.

I was personally involved in some of Lynas' discussions in Malaysia when they were looking for a site for their processor. That was nearly 5 years ago and was definitely fast tracked bureaucratically & enviromentally by the Malaysia Government - so other competitors will take much longer to accomplish the same.

What everyone ignores in the supply / demand debate is that end users will move away from China (if not already judging by the recent supply agreement signed with a Japanese co) as they are now seen as not being a reliable supplier for a strategic raw material. And the end products are high value so lower prices for the raw materials is not as important as reliability of supply in that case.

Lynas's advantage in being first to market will be considerable - and certainly more than 2 years IMHO.

What makes me wonder is why more official questions are not being raised as to the motive's & integrity of JPM & others' activities which surely have to border on a conflict of interest - especially against minority shareholder interests.

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[COLIN]

I must admit that I hadn't expected LYC sp to fall this fast to this extent. I'm glad I had the gumption to heed what the technicals seemed to be telling me, and bailed out at 154. (Phaedrus will be proud of me!)

The market seems to be losing interest in REE's, at least for the time being. ARU is down today and AKM is static. Tin seems to be an area of focus at the moment.

[stevo1]

I must admit that I hadn't expected LYC sp to fall this fast to this extent. I'm glad I had the gumption to heed what the technicals seemed to be telling me, and bailed out at 154. (Phaedrus will be proud of me!)

The market seems to be losing interest in REE's, at least for the time being. ARU is down today and AKM is static. Tin seems to be an area of focus at the moment.

Well done on that Colin that TA is a great thing for trading.

Certainly the SP has gone ballistic (in a downward way) much against FA.

For me nothing has changed .(other than the paper value)

I am now looking at adding more if and when the opportunity presents .

I hope Phaedrus is not shaking his head too hard at my approach .

[COLIN]

Well done on that Colin that TA is a great thing for trading.

Certainly the SP has gone ballistic (in a downward way) much against FA.

For me nothing has changed .(other than the paper value)

I am now looking at adding more if and when the opportunity presents .

I hope Phaedrus is not shaking his head too hard at my approach .

Cheers, stevo. And I fully expect to re-enter LYC again sometime, when it gets over this downturn. Its "first mover" advantage is very real.