China Still Strangling Rare Earths Market, Says Molycorp CEO

At first glance, many analysts cheered China’s announcement earlier this month that it would allow another 15,738 metric tons of rare earth material exports, bringing the year’s total to roughly 30,000.

Think again, says the man responsible for one of the world’s most lauded mining projects, meant to lead the world to rare earth independence from China — the country currently responsible for almost all global output.

“Everybody seems to be relaxed because the year-on-year number for 2011 versus 2010 is basically the same amount of materials, roughly 30,000 tons of export quotas,” Molycorp Inc. CEO Mark Smith said in an interview. “The discrepancy is created because China continues to add more products that are covered by the quotas, but we never seem to want to take that into account.”

Doing an apples-to-apples comparison, Smith says, China’s export quota is really closer to around 20,000 tons. Meanwhile, he predicts the global demand to be much higher.

U.S. and E.U. officials criticized China’s quota announcement, which came days after a World Trade Organization ruling against the country for export controls of other materials — a development many analysts see as a sign of how the WTO may view similar complaints related to Chinese curbs on rare earth exports (ClimateWire, July 6).

The Office of the U.S. Trade Representative, according to a statement obtained by Reuters, believes the latest Chinese export quota announcement amounts to a 40 percent decrease from 2009 levels because of the new products included in the allotment.

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Source: The New York Times
By MANUEL QUINONES