Outline on the development and Policies of China Rare Earth industry ...
Outline on the development and Policies of China Rare Earth industry
China Rare Earth Industry started in 1950’s, after 50 years of development and construction, remarkable achievements in resource utilization and science & technology have been made. China has become the largest country of rare-earth deposits, producer, consumer and exporter. 1. Resources Up to now, China is still the largest country of rare-earth deposits. Rare earth mines distributed widely in China and about 88% of rare earth deposits concentrated in Baotou, Sichuan, and Jiangxi. Figure 1 shows rare earth proportion in different region. Figure 1 shows that Rare earth mines distribute widely in China, from the north to the south. About 88% of rare earth deposits concentrated in Baotou, Sichuan, and Jiangxi. we can find that about 83% located in Baiyunebo, Baotou, Inner Mongolia, 8% in Shandong province, 3% in Sichuan province, featured as light rare earth deposits(La, Ce, Pr, Nd Sm, Eu,). 3% of the deposits located in the south of China, represented by Jiangxi province, featured as middle and heavy rare earth deposits(Middle: Gd, Tb, Dy, Ho, Heavy: Er, Tm, Yb, Lu, Sc, Y).
Up to now, China is still the largest country of rare-earth deposits. According to related data, in 2005, the proved reserves in China are 67.80 million tons, namely 55% of the world total rare earth reserves. But in my opinion, with the discovery of new rare earth deposits worldwide and consumption of the proved rare earth reserves in China, this ratio is declining, is estimated as 35%, and will continue to decline. Fig. 2 shows proportion change of China rare earth reserves against the whole world.
2. Production Most of the rare earth enterprises locate around the large rare earth mines, such as Baotou city, Sichuan province and Ganzhou city. There are about 24 enterprises for rare earth concentrate production, and 100 rare earth enterprises for smelting separation production in China. Conservative estimate, the rare earth production capacity has reached 170 thousand tons per year, and might surpass 200 thousand tons per year. Surrounding rare earth deposits, three major producing areas formed, and characterized as the North and the South production systems. The three major producing areas: A. North producing area based on raw materials from Baotou, with separation capacity of 80 thousand tons. B. Middle and heavy rare earth producing area with separation capacity of 60 thousand tons based on raw materials from the seven provinces in the south of China, mainly in Jiangxi province, Ganzhou city. C. The refined bastnaesite concentrates producing area with separation capacity of 30 thousand tons. Two producing systems of light and heavy rare earths are: The north technical system, characterized as light rare earth products, the main products are rare earth concentrates, alloys, mixed rare earth compounds, metals and single rare earth compounds, and other extension products，such as polishing powder, permanent magnetic materials and hydrogen storage alloys. The south technical system, characterized as heavy rare earth products, the main products are all kinds of high purity single rare earth compounds and metals, concentrates, mixed metals and alloys. 2.1 Product Structure：
Fig.3, Fig4, Fig.5, Fig.6 shows outputs of rare earth concentrates, smelting separation products, metals, and oxides respectively. It can be noticed that before 2006, the outputs of all kinds of rare earth products increased steadily in general. But a sharp decrease occurred in
2007 in all kinds of rare earth products. Compared with 2006, the outputs of concentrates and smelting and extracting products in 2007 decreased 8.8% and 19.8 % respectively. This should be attributed to the implement of mandatory planning of rare earth production for total quantity control. 2.2 Consumption:
Figure 7 shows the consumption from 1988 to 2008. It can be noticed that the consumption of rare earths in China increased rapidly since 2004. During the 29 years from 1978 to 2007, China annual consumption increased from 1 thousand tons to 72.6 thousand tons, it was a tremendous increase of 72.6 times. The consumption was 67.68 thousand tons in 2008, a slight decrease compared with that in 2007.
Figure 8 shows consumption comparison between China and the world. From 2005 on, the
consumption of China surpassed 50% of the world total consumption.
Fig.9 shows consumption structure of China from 1988 to 2008. In China, rare earths were mainly consumed in traditional areas of metallurgy, machinery, petroleum industry， chemical industry，light industry, textile industry, agriculture, in new materials like magnets, phosphors, hydrogen storage, catalysts for automobile exhaust and polishing powder. There was a dramatic change in the consumption structure, the consumption of rare earths in new materials increased very fast since 2004. In 1987, the consumption of rare earths in new materials was only 1%, but in 2007, it was 53%. In 2008, it was claimed that about 60% of rare earths was consumed in new materials in China. By the year of 2015, it is estimated that the demand of rare earths is expected to reach 210 thousand tons; China's domestic demand will be 138,000 tons. By 2020, china’s domestic demand is expected to reach 190,000 tons, including 130,000 tons consumed in high-tech fields, account for 68% of global total consumption. It can be concluded that Rare Earth New Materials has become a major growth point of China rare earth industry. 2.3 Exportation: Figure 10 and figure 11 showed the gross volume and gross value of exports from 1979 to 2008 respectively. It indicated that the gross volume of exports had been in a growth trend and reached a record of 57,400 tons in 2006, and then declined in 2007 and 2008. Although China began to control exports of rare earth products with quota administration since 1999, the total exports did not decrease generally until 2007.
Fig.12 shows the average prices from 1979 to 2008. From 1998 to 2005, the annual average of gross value for exports was about $420 million US$, the annual average of gross volume for exports was about 46946.63 tons, namely 8.98 US$/Kg, isn’t it underpriced? In 2007, the price was about 24 US$/Kg, this price might be reasonable.
3. Tendency and activities of China rare earth industry. 3.1 Tendency:
In recent two years, there was a tendency of regional integration. Through asset restructuring, merger and integration, there will be 20 rare earth enterprises left after 2015. The strategy of regional integration will improve the situation of scatter, disorder, and small scale of China rare earth enterprises in the past. It will play an important role in keeping a steady production, balancing the demand and the supply, and protecting the environment. 3.2 Activities: The regional integration represented by the establishment of some larger scale companies: 1. In Baotou: Inner Mongolia Baotou Steel Rare Earth International Trade Co., Ltd. established in December 2008. It is based on Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co., Ltd, and some other rare earth enterprises using raw materials from Baotou. It has been given government approval to build a strategic reserve for those surplus products of rare earths. 2. In Jiangxi: China Minmetals Rare Earth Co. Ltd. established in October 2008. It will invest 2 billion RMB in the next 5 years to reorganize enterprises in Ganzhou city, Jiangxi province. 3. Early in December 2004, Ganzhou Rare Earth Mineral Industry Co. Ltd. was established to reunite the original 88 enterprises of rare earth mining company. 4. In Sichuan: In 2009, Jiangxi Copper Co., Ltd. established a joint venture with Sichuan Province Mining Investment Group Co., Ltd. to develop Sichuan rare earth deposits. 5. In Guangdong: Guangdong Rising Nonferrous Metals Group Co. Ltd. restructuring rare earth mines and enterprises in Guangdong province and is the only legal mining company in Guangdong Province. 6. Establishment of China Rare Earth Industry Association. Despite China's rare earth industry occupies an important position in the world, but there is no association with rare earth enterprises as the core members until now. Preparation has been made to establish China Rare Earth Industry Association in 2009. Its main role should be to regulate the market activities, to keep the market in order, to monitor the rare-earth industrial economic operation, and to create a fair competitive environment for all enterprises, to promote enterprises in self-restraint and self-management, to develop international cooperation and exchange, to protect the common interests of its members. 3.3 Policies We all pay many attentions on China rare earth industrial policies. I will present a brief introduction here. I must declare that what I am talking here is just for your reference, all information is not official one, but a compiled one according to public information on the Medias. If you want to know the official one, please attend China Rare Earth Summit to be held in August in Beijing. In order to standardize the management of rare earth enterprises and promote the healthy development of rare earth industry in China, a series policies and regulations have been or will be released. The upcoming Policy covers rare earth mining, smelting separation, new materials, and industrial applications. It is aimed at effectively developing China's rare earth resources, enhancing the concentration of rare earth industry, protecting the environment, and promoting
the application of rare earths in high-tech fields. The new policies lie in 7 aspects mainly: A. License for mining: All mining enterprises must have Rare Earth Mining Permit conferred by the government; the outputs of rare earth products must obey the mandatory plan, and the plan will be adjusted according to market changing; the investment of rare earth resources out of China are encouraged for China enterprises. B. Access conditions: before 2015, no project on rare earth smelting separation could be approved, and no production capacity could be increased. A higher requirement on production scale, equipment, environment protection, technical and economic indicators, consumption indicators of resources and energy will be obliged. All present rare earth enterprises must increase investment in research, development, technique and equipments so as to improve product quality and to achieve cleaner production. Applications of rare earth products in high-tech are encouraged, especially application in information technology, environmental protection, energy, and rare earth recycling economy should be developed. C. Exportation: It is known to all that exports of rare earth products are controlled by quotas. Besides, all kinds of rare-earth minerals, mixed rare earth salts, such as mixed rare earth chlorides, mixed rare earth carbonates are prohibited to export. In early 2009, there was news on the internet to claim that china will prohibit the export of terbium and dysprosium metals, soon after an officer from China's Ministry of Industry and Information Technology (CMIIT) announced that China won’t prohibit but will limit the export of terbium and dysprosium metals. D. Importation: rare earth products complied with the relevant provisions could be imported, all radioactive or polluting rare-earth minerals and rare earth scrap materials are prohibited to import. E. Tax policy on rare earth export: In 1985, China began to implement the export tax rebate policy for rare earth products. from January 1, 2004, export tax rebate for rare earth metals was adjusted from 13% to zero, the export tax rebate rate for yttrium metal, scandium metal and its compounds, inorganic or organic compounds was adjusted from 17%, 13% to 5%. From May 1, 2005, the export tax rebates for rare earth metals, rare earth oxides, rare earth salts were abolished On November 1, 2006, the regulation of imposing export tariffs on rare earth products was released and would implement by June 1, 2007, the tax rate was 10%. F. Foreign Investment: Prohibiting foreign investment in rare-earth mine, allowing foreign joint ventures, cooperation, investments of rare earth smelting and separation projects, encouraging foreign capitals to invest projects of intensive processing, new materials and applications of rare earths. G. Environmental protection: Environmental problems are critical problems facing all countries of the world. The government of China attaches great importance to the protection of the environment. It is also a serious problem facing China rare earth enterprises. In some areas of China, the rare earth mining led to the destruction of vegetation, water loss and soil erosion. During Rare earth smelting, extraction process, a
large number of chemical raw materials, such as acid and alkali, extraction agent were used, producing a large amount of waste (exhaust) gas.., waste water, and waste residue. For most of the rare earth enterprises, there were no sufficient treatment facilities; as to some small rare earth smelting separation factories, there were even no facilities for environmental protection. The three kinds of wastes led to a tremendous problem, heavy pollution of the atmosphere, water and land. In order to protect the environment, the government of China has formulated more stringent (strict) emission standards for rare earth industry. The implement of new standards will force rare earth production enterprises to upgrade its technology, to increase costs, and might lead to the closure of some small and medium rare earth enterprises. Its main purpose is to protect the environment, to prohibit production behaviors of polluting the environment. The government will support projects on energy saving, environmental protection, low consumption and pollution free technique. 4. Conclusion In this section, some immature ideas on the future of rare earths were described. The tightening of China Rare Earth export policy is bound to stimulate the change of the world's rare earth industry. It is time to invest projects on rare earths world. But there are some kinds of risks. Considering China's huge production capacity of rare earth products, the investment in rare-earth projects outside of China must bear considerable risks. The costs are the main problem. The prices of rare earth products from China is really too cheap to buy. How could they? Anyone knows that it is mainly because of the low costs of labor force and environmental protection. With the implement of new environmental standards on rare earth smelting separation production from China government, with the enhancement of technique and equipments requirement, the costs for rare earth production will surely increase, the investment risks will gradually decline. But it will be a long time to form a stable supply worldwide. Whenever there are profits, there is greed. Illegal mining and smuggling are the two main kinds of risks facing all investment of rare earths. Illegal mining will always undermine not only China rare earth industry, but also the development of world rare earth industry; illegal mining will put all investment on rare earths into a very dangerous situation. Smuggling is another threat to for rare earth investment. It is estimated that there were about 30 to 40 thousand tons of rare earth products smuggled from China every year. In order to ensure the effects of the new policy, the government will have to struggle with illegal mining and smuggling hardly and continuously. The government is trying to curb illegal mining and smuggling. Two sides to any coin, in an age of the global economic integration, or say globalization economy. Any regional changes may have a significant impact on the world. Considering the dependence of modern high-tech on the rare earths, I think the Government of China will give serious consideration to the rare earth export policy. The main purpose of China Rare Earth Industry Policy is to protect the environment, to change the situation of scatter, disorder, and small scale of China rare earth enterprises, so as to elevate the prices of rare earth products to a reasonable range. As to exportation, I think China will moderately control but will not prohibit the export of rare
earth products, China will also take care of the demand for rare earths worldwide by adjusting the quotas of rare earth supply to an appropriate range. Though consumption of rare earth products in China has reached 60% of her total production, the development of China's rare earth industry will still rely on the international market to a large extent. In my opinion, from the view of humanity, rare earth elements are treasures given to all human beings by nature, wherever they are located, we all have the responsibilities to protect them, to develop them reasonably, to make them benefit the peaceful development of the world. 5. A brief induction of the upcoming events of the Chinese Society of Rare Earths: The 6
th
International Conference on Rare Earth Development and Application and China Rare Earth Summit will be held in this coming August 2-6. All attendees are warmly welcome to attend. For detail information, please visit the conference website at http://www.cs-re.org.cn.icre2010.
April 7, 2010, Beijing China
China Rare Earth Industry started in 1950’s, after 50 years of development and construction, remarkable achievements in resource utilization and science & technology have been made. China has become the largest country of rare-earth deposits, producer, consumer and exporter. 1. Resources Up to now, China is still the largest country of rare-earth deposits. Rare earth mines distributed widely in China and about 88% of rare earth deposits concentrated in Baotou, Sichuan, and Jiangxi. Figure 1 shows rare earth proportion in different region. Figure 1 shows that Rare earth mines distribute widely in China, from the north to the south. About 88% of rare earth deposits concentrated in Baotou, Sichuan, and Jiangxi. we can find that about 83% located in Baiyunebo, Baotou, Inner Mongolia, 8% in Shandong province, 3% in Sichuan province, featured as light rare earth deposits(La, Ce, Pr, Nd Sm, Eu,). 3% of the deposits located in the south of China, represented by Jiangxi province, featured as middle and heavy rare earth deposits(Middle: Gd, Tb, Dy, Ho, Heavy: Er, Tm, Yb, Lu, Sc, Y).
Up to now, China is still the largest country of rare-earth deposits. According to related data, in 2005, the proved reserves in China are 67.80 million tons, namely 55% of the world total rare earth reserves. But in my opinion, with the discovery of new rare earth deposits worldwide and consumption of the proved rare earth reserves in China, this ratio is declining, is estimated as 35%, and will continue to decline. Fig. 2 shows proportion change of China rare earth reserves against the whole world.
2. Production Most of the rare earth enterprises locate around the large rare earth mines, such as Baotou city, Sichuan province and Ganzhou city. There are about 24 enterprises for rare earth concentrate production, and 100 rare earth enterprises for smelting separation production in China. Conservative estimate, the rare earth production capacity has reached 170 thousand tons per year, and might surpass 200 thousand tons per year. Surrounding rare earth deposits, three major producing areas formed, and characterized as the North and the South production systems. The three major producing areas: A. North producing area based on raw materials from Baotou, with separation capacity of 80 thousand tons. B. Middle and heavy rare earth producing area with separation capacity of 60 thousand tons based on raw materials from the seven provinces in the south of China, mainly in Jiangxi province, Ganzhou city. C. The refined bastnaesite concentrates producing area with separation capacity of 30 thousand tons. Two producing systems of light and heavy rare earths are: The north technical system, characterized as light rare earth products, the main products are rare earth concentrates, alloys, mixed rare earth compounds, metals and single rare earth compounds, and other extension products，such as polishing powder, permanent magnetic materials and hydrogen storage alloys. The south technical system, characterized as heavy rare earth products, the main products are all kinds of high purity single rare earth compounds and metals, concentrates, mixed metals and alloys. 2.1 Product Structure：
Fig.3, Fig4, Fig.5, Fig.6 shows outputs of rare earth concentrates, smelting separation products, metals, and oxides respectively. It can be noticed that before 2006, the outputs of all kinds of rare earth products increased steadily in general. But a sharp decrease occurred in
2007 in all kinds of rare earth products. Compared with 2006, the outputs of concentrates and smelting and extracting products in 2007 decreased 8.8% and 19.8 % respectively. This should be attributed to the implement of mandatory planning of rare earth production for total quantity control. 2.2 Consumption:
Figure 7 shows the consumption from 1988 to 2008. It can be noticed that the consumption of rare earths in China increased rapidly since 2004. During the 29 years from 1978 to 2007, China annual consumption increased from 1 thousand tons to 72.6 thousand tons, it was a tremendous increase of 72.6 times. The consumption was 67.68 thousand tons in 2008, a slight decrease compared with that in 2007.
Figure 8 shows consumption comparison between China and the world. From 2005 on, the
consumption of China surpassed 50% of the world total consumption.
Fig.9 shows consumption structure of China from 1988 to 2008. In China, rare earths were mainly consumed in traditional areas of metallurgy, machinery, petroleum industry， chemical industry，light industry, textile industry, agriculture, in new materials like magnets, phosphors, hydrogen storage, catalysts for automobile exhaust and polishing powder. There was a dramatic change in the consumption structure, the consumption of rare earths in new materials increased very fast since 2004. In 1987, the consumption of rare earths in new materials was only 1%, but in 2007, it was 53%. In 2008, it was claimed that about 60% of rare earths was consumed in new materials in China. By the year of 2015, it is estimated that the demand of rare earths is expected to reach 210 thousand tons; China's domestic demand will be 138,000 tons. By 2020, china’s domestic demand is expected to reach 190,000 tons, including 130,000 tons consumed in high-tech fields, account for 68% of global total consumption. It can be concluded that Rare Earth New Materials has become a major growth point of China rare earth industry. 2.3 Exportation: Figure 10 and figure 11 showed the gross volume and gross value of exports from 1979 to 2008 respectively. It indicated that the gross volume of exports had been in a growth trend and reached a record of 57,400 tons in 2006, and then declined in 2007 and 2008. Although China began to control exports of rare earth products with quota administration since 1999, the total exports did not decrease generally until 2007.
Fig.12 shows the average prices from 1979 to 2008. From 1998 to 2005, the annual average of gross value for exports was about $420 million US$, the annual average of gross volume for exports was about 46946.63 tons, namely 8.98 US$/Kg, isn’t it underpriced? In 2007, the price was about 24 US$/Kg, this price might be reasonable.
3. Tendency and activities of China rare earth industry. 3.1 Tendency:
In recent two years, there was a tendency of regional integration. Through asset restructuring, merger and integration, there will be 20 rare earth enterprises left after 2015. The strategy of regional integration will improve the situation of scatter, disorder, and small scale of China rare earth enterprises in the past. It will play an important role in keeping a steady production, balancing the demand and the supply, and protecting the environment. 3.2 Activities: The regional integration represented by the establishment of some larger scale companies: 1. In Baotou: Inner Mongolia Baotou Steel Rare Earth International Trade Co., Ltd. established in December 2008. It is based on Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co., Ltd, and some other rare earth enterprises using raw materials from Baotou. It has been given government approval to build a strategic reserve for those surplus products of rare earths. 2. In Jiangxi: China Minmetals Rare Earth Co. Ltd. established in October 2008. It will invest 2 billion RMB in the next 5 years to reorganize enterprises in Ganzhou city, Jiangxi province. 3. Early in December 2004, Ganzhou Rare Earth Mineral Industry Co. Ltd. was established to reunite the original 88 enterprises of rare earth mining company. 4. In Sichuan: In 2009, Jiangxi Copper Co., Ltd. established a joint venture with Sichuan Province Mining Investment Group Co., Ltd. to develop Sichuan rare earth deposits. 5. In Guangdong: Guangdong Rising Nonferrous Metals Group Co. Ltd. restructuring rare earth mines and enterprises in Guangdong province and is the only legal mining company in Guangdong Province. 6. Establishment of China Rare Earth Industry Association. Despite China's rare earth industry occupies an important position in the world, but there is no association with rare earth enterprises as the core members until now. Preparation has been made to establish China Rare Earth Industry Association in 2009. Its main role should be to regulate the market activities, to keep the market in order, to monitor the rare-earth industrial economic operation, and to create a fair competitive environment for all enterprises, to promote enterprises in self-restraint and self-management, to develop international cooperation and exchange, to protect the common interests of its members. 3.3 Policies We all pay many attentions on China rare earth industrial policies. I will present a brief introduction here. I must declare that what I am talking here is just for your reference, all information is not official one, but a compiled one according to public information on the Medias. If you want to know the official one, please attend China Rare Earth Summit to be held in August in Beijing. In order to standardize the management of rare earth enterprises and promote the healthy development of rare earth industry in China, a series policies and regulations have been or will be released. The upcoming Policy covers rare earth mining, smelting separation, new materials, and industrial applications. It is aimed at effectively developing China's rare earth resources, enhancing the concentration of rare earth industry, protecting the environment, and promoting
the application of rare earths in high-tech fields. The new policies lie in 7 aspects mainly: A. License for mining: All mining enterprises must have Rare Earth Mining Permit conferred by the government; the outputs of rare earth products must obey the mandatory plan, and the plan will be adjusted according to market changing; the investment of rare earth resources out of China are encouraged for China enterprises. B. Access conditions: before 2015, no project on rare earth smelting separation could be approved, and no production capacity could be increased. A higher requirement on production scale, equipment, environment protection, technical and economic indicators, consumption indicators of resources and energy will be obliged. All present rare earth enterprises must increase investment in research, development, technique and equipments so as to improve product quality and to achieve cleaner production. Applications of rare earth products in high-tech are encouraged, especially application in information technology, environmental protection, energy, and rare earth recycling economy should be developed. C. Exportation: It is known to all that exports of rare earth products are controlled by quotas. Besides, all kinds of rare-earth minerals, mixed rare earth salts, such as mixed rare earth chlorides, mixed rare earth carbonates are prohibited to export. In early 2009, there was news on the internet to claim that china will prohibit the export of terbium and dysprosium metals, soon after an officer from China's Ministry of Industry and Information Technology (CMIIT) announced that China won’t prohibit but will limit the export of terbium and dysprosium metals. D. Importation: rare earth products complied with the relevant provisions could be imported, all radioactive or polluting rare-earth minerals and rare earth scrap materials are prohibited to import. E. Tax policy on rare earth export: In 1985, China began to implement the export tax rebate policy for rare earth products. from January 1, 2004, export tax rebate for rare earth metals was adjusted from 13% to zero, the export tax rebate rate for yttrium metal, scandium metal and its compounds, inorganic or organic compounds was adjusted from 17%, 13% to 5%. From May 1, 2005, the export tax rebates for rare earth metals, rare earth oxides, rare earth salts were abolished On November 1, 2006, the regulation of imposing export tariffs on rare earth products was released and would implement by June 1, 2007, the tax rate was 10%. F. Foreign Investment: Prohibiting foreign investment in rare-earth mine, allowing foreign joint ventures, cooperation, investments of rare earth smelting and separation projects, encouraging foreign capitals to invest projects of intensive processing, new materials and applications of rare earths. G. Environmental protection: Environmental problems are critical problems facing all countries of the world. The government of China attaches great importance to the protection of the environment. It is also a serious problem facing China rare earth enterprises. In some areas of China, the rare earth mining led to the destruction of vegetation, water loss and soil erosion. During Rare earth smelting, extraction process, a
large number of chemical raw materials, such as acid and alkali, extraction agent were used, producing a large amount of waste (exhaust) gas.., waste water, and waste residue. For most of the rare earth enterprises, there were no sufficient treatment facilities; as to some small rare earth smelting separation factories, there were even no facilities for environmental protection. The three kinds of wastes led to a tremendous problem, heavy pollution of the atmosphere, water and land. In order to protect the environment, the government of China has formulated more stringent (strict) emission standards for rare earth industry. The implement of new standards will force rare earth production enterprises to upgrade its technology, to increase costs, and might lead to the closure of some small and medium rare earth enterprises. Its main purpose is to protect the environment, to prohibit production behaviors of polluting the environment. The government will support projects on energy saving, environmental protection, low consumption and pollution free technique. 4. Conclusion In this section, some immature ideas on the future of rare earths were described. The tightening of China Rare Earth export policy is bound to stimulate the change of the world's rare earth industry. It is time to invest projects on rare earths world. But there are some kinds of risks. Considering China's huge production capacity of rare earth products, the investment in rare-earth projects outside of China must bear considerable risks. The costs are the main problem. The prices of rare earth products from China is really too cheap to buy. How could they? Anyone knows that it is mainly because of the low costs of labor force and environmental protection. With the implement of new environmental standards on rare earth smelting separation production from China government, with the enhancement of technique and equipments requirement, the costs for rare earth production will surely increase, the investment risks will gradually decline. But it will be a long time to form a stable supply worldwide. Whenever there are profits, there is greed. Illegal mining and smuggling are the two main kinds of risks facing all investment of rare earths. Illegal mining will always undermine not only China rare earth industry, but also the development of world rare earth industry; illegal mining will put all investment on rare earths into a very dangerous situation. Smuggling is another threat to for rare earth investment. It is estimated that there were about 30 to 40 thousand tons of rare earth products smuggled from China every year. In order to ensure the effects of the new policy, the government will have to struggle with illegal mining and smuggling hardly and continuously. The government is trying to curb illegal mining and smuggling. Two sides to any coin, in an age of the global economic integration, or say globalization economy. Any regional changes may have a significant impact on the world. Considering the dependence of modern high-tech on the rare earths, I think the Government of China will give serious consideration to the rare earth export policy. The main purpose of China Rare Earth Industry Policy is to protect the environment, to change the situation of scatter, disorder, and small scale of China rare earth enterprises, so as to elevate the prices of rare earth products to a reasonable range. As to exportation, I think China will moderately control but will not prohibit the export of rare
earth products, China will also take care of the demand for rare earths worldwide by adjusting the quotas of rare earth supply to an appropriate range. Though consumption of rare earth products in China has reached 60% of her total production, the development of China's rare earth industry will still rely on the international market to a large extent. In my opinion, from the view of humanity, rare earth elements are treasures given to all human beings by nature, wherever they are located, we all have the responsibilities to protect them, to develop them reasonably, to make them benefit the peaceful development of the world. 5. A brief induction of the upcoming events of the Chinese Society of Rare Earths: The 6
th
International Conference on Rare Earth Development and Application and China Rare Earth Summit will be held in this coming August 2-6. All attendees are warmly welcome to attend. For detail information, please visit the conference website at http://www.cs-re.org.cn.icre2010.
April 7, 2010, Beijing China
