Wednesday, April 16, 2014

ASIA MINING: China and Rare Earth Economic Weapon


 "Rare Earth Metals" is the subject that is not widely  discussed in mining; however, this is the part of industry life that is very crucial. Production  of jet engines, nuclear reactors, medical implants, electronics, etc. cannot be done without  small amounts of rare earth  metals. One of the key companies involved in the business is  Australian Arafura Resources, and I took the liberty to reproduce part of  their investor presentation  that can be downloaded here.

This picture very nicely depicts the applications of rare earth.

If you look at the presentation – it also has a detailed description of the industry that once again shows heavy Chinese  involvement. (In fact, not long ago, Jiangsu Eastern China Non-Ferrous Metals Investment Holding Company has entered an equity investment agreement - 25% - with Arafura Resources).

Today we have heard another voice from Australia: "Beijing vies to monopolise world's future technologies" – a report in The Australian. This report has exciting news that is probably quietly not known to many:

“After a long, relentless campaign of price wars and export quota reductions, more than 95% of the global supply of rare earth metals -- a group of 17 "lanthanide" elements employed in hundreds of technologies ranging from mobile phones and BlackBerrys to lasers and aviation -- is produced by China”

And Japan was the first to react: “China's rising strength in rare earth supply and its apparent willingness to use that as "a 21st-century economic weapon" have triggered what government sources in Tokyo told The Times was an invisible tsunami of panic in Japanese industry”

Well, this leads to some other changes that are mentioned in the report.
That is another vivid spot on the changing Mining Picture of Asia and the World in general

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