Does China drop the proposed RE-magnet technology export ban?; PRC RE quota details; Vital CA file for bankruptcy, REEtec need new supply; Hallgarten's strategy; Pensana lift handouts from UK govt;
Rare Earth 9 October 2023
Japan basically solved its problem
Lynas’ figures demonstrate that rare earth mining and processing can be profitable in the Western world, thanks to China's assistance in purchasing Lynas' "SEG" heavy rare earth concentrate. The key to Lynas' success lies in Japan, which provided financial support throughout and takes the majority of Lynas' value-products, effectively reducing Japan's reliance on China for light rare earths.
However, Japan still needs to address its dependency on China for heavy rare earths. While demanding Lynas' commitment to favourably treat Japan regarding heavy rare earths from the planned US separation plant, Japan has patiently awaited progress from Namibia Critical Metals, which has been slow and agonising.
What sets Japan apart from other countries is its existing rare earth supply chain, including rare earth permanent magnets, which are scarce in the US and the EU.
Afghans accuse Chinese companies of 'looting' country's mines
Over the past two years, more than 500 Chinese investors have come to Afghanistan to invest in Afghanistan's mines, and around 100 Chinese companies have registered themselves with the Ministry of Mines and Petroleum to invest in the country's mining sector.
The secret extraction of precious resources from Afghanistan's mines is ongoing in some provinces, say witnesses.
Dozens of trucks loaded with minerals extracted in Khaneshen and Desho districts of Helmand province first go to Pakistan and are then moved to China, a resident of Helmand told Salaam Times on the condition of anonymity.
The two districts have lithium and marble deposits.
nvesting in mines and providing loans with unclear terms to Afghanistan are China's way of trying to establish control over the country, observers say.
First cracks in the enduring Afghan-Chinese friendship?
Lao gov't orders resolute efforts to ensure proper management of rare earth mining
Lao Prime Minister has instructed the relevant agencies to expedite the drafting of a strategy on rare earth metals and other minerals, to ensure proper management of mining operations in the southeast Asian country.
Lawmakers urged the government to set up laboratories to analyze each type of mineral deposit found in Laos, saying that strict oversight and closer collaboration in mining operations would enable the government to collect more revenue from mining companies and ensure that mineral resources were better managed.
Laos feels ripped off by Chinese miners, whether these come directly from China or whether they come through a third country.
Chinese Investors Briefed on Industrial, Mining Investment Opportunities in Saudi Arabia
The Saudi Minister of Industry and Mineral Resources Bandar Ibrahim Alkhorayef met with Chinese investors in Shanghai, where they discussed investment opportunities available in the Kingdom in mining and industry.
President of the Royal Commission for Jubail and Yanbu Khalid Al-Salem, Vice Minister of Industry and Mineral Resources for Mining Affairs Khalid Al-Mudaifer, and leading officials of the industry and mining sectors attended the meeting, which previewed the prominent investment opportunities provided by the Kingdom in the industrial and mining sectors.Alkhorayef made the official visit to the People's Republic of China to strengthen the economic partnership in the industrial and mining sectors.
Saudi Arabia and Japan had agreed a couple of months ago to jointly explore for rare earths in third countries.
Kazakhstan, Germany Investment Roundtable Explores Key Areas for Cooperation
“The global demand for critical materials and rare earth metals is expected to quadruple by 2040. The World Bank estimates that there are over 5,000 unexplored deposits still present in Kazakhstan valued over $46 trillion. That is why I have proposed to Chancellor Scholz the creation of a Consortium for the implementation of joint raw materials projects. This initiative, along with our existing intergovernmental partnership agreements, would bring our cooperation to the new level,” Tokayev said.
Several rare earth projects in Kazakhstan floundered during the past 15 years.
China’s GDP is dependent on trade
China’s trade to GDP ratio shows some of China’s foreign trade dependence. It goes deeper, as same as in Japan, because China’s domestic supply chains catering exclusively to exports are actually not counted towards exports:
The end of Germany’s China illusion
In mid-July, Chancellor Olaf Scholz and his coalition government published Germany’s first ever comprehensive China strategy, an all of government position paper on the state of the German relationship with its largest trading partner. The document is a foundation that will guide policymaking in Berlin in the months to come, from enhancing cyber security and protecting critical infrastructure, to industrial policy and building new global partnerships. It could eventually result in one of the most fundamental changes in Germany’s foreign and economic policy of the last few decades: a final farewell to “Wandel durch Handel” (“change through trade”).
Has China abandoned the “Revised Catalogue of Technologies Prohibited and Restricted from Export”?
We reported the details of the proposed list on 2 February 2023, long before the Bloombergs, Reuters and Nikkeis of this planet even woke up to it.
The list added rare earth permanent magnets know-how, apart from the long pre-existing restrictions on rare earth processing and application know-how.
China’s Ministry of Commerce had published the Revised Catalogue of Technologies Restricted and Prohibited from Export for public comment on 30 December 2022. The public comment period expired on 28 January 2023.
Since then
The last thing we heard about the catalogue was on 23 February 2023:
Ministry of Commerce Spokesperson Shu Jueting: Regarding the revision of China’s Catalog of Technologies Prohibited and Restricted from Exporting, we have now concluded the public solicitation of opinions. During this process, we also received feedback from all walks of life. We are currently working with relevant departments to conduct serious research and absorb reasonable suggestions.
Meanwhile China has banned the export of military drones and it made the export of technology metals germanium and gallium licensable.
But there was not a single further word about “the catalogue.”
Abandoned?
Has the 2023 version of the “Catalog of Technologies Prohibited and Restricted from Exporting” been abandoned? If so, it would mean that the previous version of the catalogue would still be in force, which does not include the rare earth permanent magnet know-how.
Vietnam probes wind towers imported from China, weighs anti-dumping tax
Producers in Vietnam have claimed that dumping of Chinese-origin towers has caused "significant damage" to them, the government said in a statement, without elaborating.
Neither Vietnamese customs nor the statistics office provide data on wind tower imports.
According to the trade ministry, local producers were proposing an anti-dumping tax rate of 97%.
Vietnam is looking to boost wind energy as it begins the transition to becoming carbon-neutral by mid-century, aiming for wind, most of it onshore, to account for 18.5% of the total power mix by 2030.
Comparatively expensive rare earth permanent magnets are typically used for offshore wind towers, as maintenance is difficult and expensive offshore.
The merry old, time-honoured rare earth quota
Notice from the two ministries and commissions on issuing the second batch of total control targets for rare earth mining, smelting and separation in 2023
For comparison, here the first batch:
The grand total is 240,000 t REO for mining products and 230,000 t REO for smelting and separation products.
Applicability
Some ex-China analysts and junior miners seem to think, that this quota would define China’s total output. That is not the case.
The quota applies to China-domestic mined rare earths and the finished rare earth products made thereof.
Imported rare earth raw materials and the finished rare earth products made thereof do not fall under the quota.
Imports pay no resource tax
The China resource tax is applicable to domestic mined rare earth raw materials. It does not apply to imported rare earth raw materials.
In the first half of 2023 China’s rare earth raw material imports increased by 68% year on year.
Objectives of the quota
The main objective of the quota is domestic resource preservation. It also apparently seems to ensure that there is enough domestic output based domestic resources of key materials to match domestic apparent consumption of downstream products.
Why is the quota published so late?
The half-yearly quota is typically published far into the first and third quarters, this year 25 March and 25 September, but valid retrospectively for the quarter that has passed already and valid for the quarter ahead.
After diving into the numbers we can’t conclusively prove it to the last ton, but we think that the quota is designed to ensure enough domestic raw material for NdFeB is available to cover domestic apparent consumption of NdFeB magnets, not including NdFeB exports.
If so, in order to set the quota correctly, MIIT should wait for the magnet “buying seasons” after Chinese New Year and the one ahead of the national day holiday in October, to make sure the quota is market-adequate.
It is worthwhile to note that China never abandoned the age-old target to limit rare earth exports to 30,000 t per year.
Unrelated to prices
A rare earth newbie recently suggested that the rare earth quota would be designed to keep rare earth prices low. The quota represents only about ⅔ of the rare earth compounds output.
Rare earth is subject to China overall raw material policies, which are meant to create abundant raw material supply, available to domestic downstream industries at the world’s lowest cost. Policy treats raw material companies like utility companies (water, gas, electricity) and turns the domestic raw material market into a giant pressure-cooker. This is the origin of low raw material prices in China.
And, yes, the trade manipulation through China’s VAT refund upon export (or denial thereof) plays a key role in this.
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