'Dwindling resources must be protected' amid growing demand
Imports of rare earths, especially the medium and heavy variety, should be increased to meet demand and protect dwindling resources, an industry leader said.
Companies should be encouraged to explore the possibilities of boosting imports of rare earths, Liu Yinan, vice-chairman of the China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters, said.
China is the world's largest producer, and consumer, of rare earths, a group of 17 chemically similar elements crucial to the production of high-tech products. With just 23 percent of global reserves, China accounts for more than 90 percent of the world's rare earth supplies.
Global demand for rare earths is expected to rise sharply and China's demand will grow even faster, Liu said. Global demand was about 110,000 metric tons last year. China exported 16,900 tons and consumed about 83,000 tons last year.
The country has a plentiful supply of light rare earths in northern areas but a much aller amount of medium and heavy rare earths in eastern and southern areas, mostly in Jiangxi and Fujian provinces.
Light rare earths are used to produce products such as car glass, while medium and heavy rare earths, which are more expensive, are used in more advanced manufacturing, such as for turbines and chips.
There has been a rapid growth in domestic manufacturers using heavy rare earths to make, among other products, magnets and hydrogen storage cells.
Chen Zhanheng, the deputy secretary-general of the China Rare Earth Industry Association, said the limited quota for domestic manufacturing, coupled with growing demand, has led to a shortage.
Last year the country imported about 5,000 tons, he said.
But China's dominant position as a major supplier will be weakened as new global projects are emerging.
Molycorp of the United States is increasing production of rare earths next year, and Australian miner Lynas has set up plants in Malaysia and Australia. Japan has also found new suppliers from countries such as Vietnam.
New mines overseas eye China as an export market. Frontier Rare Earths from South Africa, a heavy rare earths producer, has set up an office in Shanghai to boost exports to China, Chen said.
Du Xiaoming, general manager of Chinalco Rare Earth (Jiangsu), said it is a good idea to import medium and heavy rare earths.
China may soon become a net importer of heavy rare earths, according to a research report released by Commerzbank on Aug 9.
Such a shift, from supplier to consumer, would lead to huge price increases, the Commerzbank report said.
Mark ith, chief executive officer of Molycorp, estimated that China will become a net importer of heavy rare earths by 2014 or 2015.
Alastair Metcalf, CEO of Hastings Rare Metals in Australia, said if Chinese manufacturing continues to grow, it is reasonable to assume China will need to import heavy rare earths.
But Du Shuaibing, an yst with baiinfo.com, an information website that specializes in raw materials in China, said it is unlikely that imports will exceed exports in the next decade.
"China's supply significantly exceeds demand," Du said.
Due to rampant uggling, imports of rare earths recorded by countries were in fact 1.2 times official export figures provided by the General Administration of Customs, Du said.
"Some people from Ganzhou (a rare earth production center in Jiangxi province) told me the heavy rare earths from their mines can supply for China for at least 30 years. Why bother buying from foreign mines where the price could be higher?" he asked.
