G7 and China warn each other on RE; Neo's quarterly; China's poor economy; Vietnam's rare earth growth?; Lynas insist on removal of conditions; Baotou and Shenghe annual reports;

Rare Earth 21. May 2023 #120

Accelerate our country’s transformation from a "big rare earth country" to a "great rare earth power".

潘爱华 Pan Aihua

Deputy Director of the National Defense Science, Technology & Industry Bureau

General Secretary Xi Jinping visits the Yuncheng Salt Lake in Shanxi Province, 16 May 2023. 3rd from the right is Cai Qi, member of the Standing Committee of the Politbureau and Director of the General Office of the Chinese Communist Party.

Central Asia and China meeting in Xi’an, China

Kazakhstan invites China’s companies to build car clusters

The President noted that the development of science-driven spheres such as machine building has high prospects. Kassym-Jomart Tokayev said Kazakhstan and China signed yesterday an agreement on the CKD assembly of China’s leading cars in Kazakhstan. The Head of State said Kazakhstan with vast reserves of lithium, cobaltic, nickelic, and other less-common and rare earth elements is ready for large-scale cooperation in this area.

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Correction

In our previous post we had referred to a Sumitomo rare earth metal unit in Vietnam.

Actually, this company called Vietnam Rare Earth Co., Ltd. (VREX), commissioned in 2011, originally had been a unit of Japan’s Chuo Denki Kogyo, a ferro-alloy maker and former affiliate of Sumitomo Metal Industries Ltd. VREX used to have only a capacity of a couple of hundred tons of rare earth oxides per year.

Sumitomo Metal Industries merged with Nippon Steel in 2012.

In December 2013, in the course of overall industrial restructuring, Nippon Denko acquired Chuo Denko Kogyo, the owner of VREX, in an all-share deal.

In 2016 the company - since called Shin Nippon Denko - transferred its magnetic alloy business to Santoku Co., Ltd.

In 2017 Santoku merged with Wakayama Rare Earth Co., Ltd. Then 2018 Santoku were taken over by Hitachi Metals - now called “Proterials” - and Sojitz (Lynas’ sole agent).

Today Santoku are 24% of Japan’s neodymium metal plus NdPr alloy output.

Also in 2016, during the process of integrating Chuo Denko Kogyo into Shin Nippon Denko, VREX were sold to China’s Shenghe Resources. Currently 90% of VREX are held by Shenghe Resources Singapore and 10% are held by Seidou Co Ltd, Japan, both 100% daughter companies of Shenghe Resources Holdings.

We had missed that part.

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G7 countries signal China over use of trade as political tool, warns of ‘consequences’

Hiroshima: The United States and other rich democracies said on Saturday that countries attempting to use trade as a weapon would face “consequences”, sending a strong signal to China over practices Washington has long said amount to economic bullying.

The leaders of the Group of Seven (G7) nations, meeting in the Japanese city of Hiroshima for a three-day summit, also pledged to bolster supply chains with partners, particularly for chips, batteries and minerals.

The comments from the G7, in a joint statement on “economic resilience and economic security” did not specifically mention China, although they appear to be some of the clearest yet to be directed towards Beijing over the use of trade as a political tool.

The United States and its partners are increasingly worried about the outsized role China now plays in supply chains in everything from semiconductors to critical minerals.

China’s embassy in Britain warned the G7 countries that any words or deeds harming China’s interests would be met with “firm and resolute countermeasures”.

Grandstanding and symbolism, combined with whistling in the dark.

While Australia one way or another is going to be a significant supplier of finished rare earth products, there are no significant downstream industries who could use these rare earth products in the West - with the exception of Japan, which is currently oversupplied and fighting a defensive downstream battle.

Concretely, we do not see rare earth permanent magnet makers of scale rising in the West, absence of which amounts to wilfully denying up-and-coming rare earth makers a market.

Particularly the EU is an unmitigated political disaster with its irrational quest for sustainability where there is none and holding on to resources that are not (0.xx% TREO, ridiculous):

1. A mine is a self-depleting asset. There is nothing sustainable about mining, ever.

2. Recycling is at best a wet dream, considering that never before in human history we required such large quantities of technology metals.

3. Trees will have to fall, lurches will have to migrate and pollution will be encountered, if the EU really wants to solve the problem.

Things simply will need to get worse, before they can get any better. Living in denial and in an infinite loop of cult-like sustainability prayer sessions does not help.

The quick fix to the problem is giving up, accepting the dependency and letting China do it. This way we may still stand a chance to make a dent in global warming until 2050. The EU automotive industry will love it.

Or choose the politically correct, long, costly and painful road. But that requires tangible action today, year 12 after recognition of the problem.