Feeds

China's largest rare earth supplier halts production

PRC suffers slump as global demand slows

Build a business case: developing custom apps

China’s stranglehold on the world’s rare earth supply appears to be relaxing, with its largest producer of light rare earths forced to halt some of its operations for a month in an attempt to stop prices slipping further.

The Inner Mongolia Baotou Steel Rare Earth Hi-Tech Company is suspending its smelting and separation plants from Tuesday, and will stop providing raw materials for other companies' smelting and separation operations, according to a post on the Shanghai Stock Exchange seen by Global Times.

Prices for the rare earths, which are essential to the manufacture of a range of hi-tech kit, have apparently tumbled by around 50 per cent since the start of the year. While Japan is set to import around 10,000 tons in 2012, that's the lowest level for ten years, according to Kyodo news.

It appears that reduced demand on the back of a global economic slowdown is to blame for the price drop, rather than competition from mining operations in countries beyond China, which has more rare earths than anyone else and has been buying up offshore sources.

It’s therefore no surprise then that the Inner Mongolian-based Baotou this week revealed net profits of 120 million yuan (£11.9m), a 90 per cent drop from the same time last year.

The World Trade Organisation agreed in July to investigate claims by the US, EU and Japan that China is unfairly strangling rare earth exports to drive up prices and favour its domestic manufacturing industry.

However, China has always pleaded that any stockpiling or export restrictions were necessary because although it produces over 90 per cent of the world’s rare earths, it has barely a third of global reserves.

It has also argued that mining operations need to be reformed and scaled back in order to prevent further environmental damage, claiming that the recovery rate for rare earths is less than 50 per cent.

It should also be mentioned that China 'hosts' a thriving black market in rare earths.

Chen Zhanheng, director of the academic department of the Chinese Society of Rare Earths, told the Global Times that these producers, which sell cut price to foreign buyers, now produce around a third as much as the legitimate suppliers.

WTO investigation aside there are already signs that other nations are taking the initiative, spurred by the desire to reduce their dependence on China.

California's Mountain Pass mine is open again while Vietnam is accelerating its mining plans, backed by Japan. ®

Build a business case: developing custom apps

More from The Register

next story
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Nintend-OH NO! Sorry, Mario – your profits are in another castle
Red-hatted mascot, red-colored logo, red-stained finance books
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.