GHY Tradelines

(IndustryWeek – AFP)

Japanese researchers said Thursday they have found a rich deposit of rare earths on the Pacific seabed, with reports suggesting it could be up to 30 times more concentrated than Chinese reserves.

Mud samples taken from 5,800 meters (19,000 feet) below the waves contained highly concentrated amounts of the precious minerals, which are vital for high-tech manufacturing and used in products including wind turbines and iPods.

The proving of resources is significant for Japan, which currently relies largely on China, the source of around 90% of the world’s supply of rare earths. Manufacturers have complained in the past that Beijing restricts exports of the materials at times of tension. Read more here.
 

(The Canadian Press)

Mining production from Canada’s North will nearly double by 2020, according to a report by the Conference Board of Canada. However, the report says a lack of transportation, energy and other infrastructure are biggest obstacles to northern mining development.

The Conference Board forecasts output from the North will grow by 91% from 2011 to 2020, a compound annual growth rate of 7.5%. It says mining is the future economic driver for the region, but the correct balance must be found between risk and opportunity. Read more here.
 

(Jen Moore – Toronto Star)

The Harper government’s trade agenda is front and centre this parliamentary term as the Conservatives seek to open new markets.

While coverage of Asia-Pacific and EU agreements dominate public debate, other bilateral agreements have been quietly making their way through Parliament. The House of Commons trade committee recently passed legislation to implement the Canada-Panama free trade agreement that could come before the House for third reading as early as this week.

As in other parts of Latin America, Canada has considerable interests in Panama’s mining sector, and as MiningWatch told the trade committee during recent hearings, the free trade deal is stacked in favour of mining firms at the expense of indigenous rights and environmental protection. Read more here.
 

(Jeff Miller – Rapaport)

The U.S. Customs and Border Protection (CBP) proposed amended regulations regarding U.S. rough diamonds imports pursuant to the Clean Diamond Act of 2003, and the Rough Diamonds Control Regulations (RDCR) issued by the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury. CBP believes that it is appropriate to restate certain entry, export, and record-keeping requirements for clarity and to ensure rough diamond imports are properly controlled by the Kimberley Process Certification Scheme. Read more here.
 

(Forbes)

The World Trade Organisation has just announced that it is finally going to do something about the Chinese restrictions on rare earths. No, no, not to actually do anything, don’t be so absurd, they’ve agreed to sit down and study and discuss the points being made, that’s all…  Read more here.
 

(Jennifer Freedman – Bloomberg)

World Trade Organization judges will probe China’s export quotas and tariffs on rare earths, tungsten and molybdenum following complaints by the U.S., the European Union and Japan that the curbs break global commerce rules.

China says the limits are designed to protect dwindling natural resources and the environment. China produces more than 90 percent of the world’s rare earths, 17 chemically similar metallic elements used in the defense, renewable-energy and electronics industries by companies such as Ford Motor Co.

Rare earths became a political issue after China cut domestic output and reduced export quotas in July 2010 by 40 percent, souring ties with major users including the U.S. and Japan, where buyers reduced usage after prices rose in the first half of 2011. Read more here.

(Bloomberg – Jennifer Freedman)

China blocked a request by the U.S., the European Union and Japan for World Trade Organization judges to probe its curbs on exports of rare earths. It won’t be able to thwart a second request, which may be made on July 23.

China says it imposed the limits in 2010 to conserve resources and protect the environment. China produces 97% of the world’s rare earths, 17 chemically similar metallic elements used in Boeing Co. helicopter blades, Nokia mobile phones, Toyota Motor Corp. hybrid cars and wind turbines, according to EU data.

“China’s restrictions on rare earths and other products are violating its WTO commitments and continue to significantly distort global markets to the disadvantage of our companies,” EU Trade Commissioner Karel De Gucht said in a June 27 statement. “Despite the very clear WTO ruling earlier this year in the first raw-materials case, Beijing has not taken steps to remove these export restrictions.” Read more here.
 

(Merco Press)

Hong Kong’s Honbridge Holdings Ltd plans to build a 420-kilometre pipeline to ship iron-ore from a mine in Brazil’s Minas Gerais state to a port on the country’s Atlantic coast, the Estado de Minas newspaper reported.

The pipeline will carry a slurry of water and fine, processed iron ore to the port of Ilheus in Brazil’s Bahia state, as part of Honbridge 3.6 billion dollars Sul America de Metais (SAM) project, the paper said, citing Minas Gerais officials.

Officials said the project could require an additional 600 million in investments, bringing total spending to 4.2 billion dollars, Estado de Minas reported. Read more here.
 

(AFP/ch)

China on Thursday defended its limits on exports of rare earths, after major trading partners sought litigation through the World Trade Organization (WTO) in a months-long dispute.

“China’s export restrictions on rare earths are aimed at protecting environmental resources and people’s health, not the protection of domestic industries,” Chinese foreign ministry spokesman Hong Lei told reporters. “In light of rare earth resources, market supply, demand and consumption, we will continue to practise management over the mining, production and export of rare earths.” Read more here.
 

(Channel News Asia)

China said Wednesday its regulation of the rare earths industry was in line with global trade rules, as it faces international pressure over its control of the crucial elements.

The United States, European Union (EU), Japan and Canada lodged a complaint with the World Trade Organization (WTO) in March, claiming Beijing was unfairly choking off exports of the commodities to benefit domestic industries.

China produces more than 90% of the world’s rare earths, which are used in high-tech equipment from iPods to missiles, and has set output caps and export quotas on the coveted resources.

Gao Yunhu, vice director of the rare earths office of the Ministry of Industry and Information Technology, said its management of the industry was “in full compliance with WTO rules”. Read more here.
 

(Commodities Now)

The announcement on Friday June 1 that China is now implementing its much delayed special invoicing system for rare earths designed to stamp out rampant smuggling could worsen tensions between China and consuming nations. The new invoicing system is designed to enable the Chinese authorities to more closely monitor the sale and production of rare earths and in theory tightens their grip on the industry. Producers who are not part of the system will not be legally able to sell rare earths.

The move is potentially significant because China controls over 90% of the world’s rare earths supplies and smuggling has effectively acted as a safety net for consumers outside China. China’s official export quotas are set at around 30,000 tonnes of rare earths for this year, roughly similar to last year, however the rare earths trade estimates that almost this much again is smuggled out of the country via Hong Kong and Vietnam every year. Read more here.
 

(MarketWatch – Shane Romig)

Mining companies with operations in Argentina will be required to submit requests to the government 120 days before importing goods and set up an “import substitution” department to boost buying of locally made goods, the planning ministry said in a statement Monday. The mining companies will have to submit quarterly estimates of their purchasing needs, which will be vetted by a special working group at the Mining Ministry, according to the statement.

The new measures come amid a host of formal and informal barriers to imports thrown up by the government so far this year. The barriers are designed to safeguard the country’s international reserves by limiting imports of goods and services and to protect local manufacturers from competition from cheaper imports. Read more here.
 

(Industry Week/AFP)

Ministry of Commerce said additional quotas were given to 12 companies that recently passed environmental checks

China, which is locked in a dispute with major trading partners over its control of rare earth-minerals, on Thursday announced additional export quotas for this year. The Ministry of Commerce said it would allow companies to potentially export an additional 10,680 tonnes of rare earths, bringing the total for this year to 21,226 tonnes.

The United States, European Union and Japan lodged a complaint with the World Trade Organization in March, saying China was choking off exports of rare earths to unfairly benefit domestic industries. Read more here.
 

(China Business Watch – Tony Zhu)

A government official said on Wednesday that China’s moves to regulate its rare earth industry are aimed at protecting the environment and sustaining growth, and pledged to actively respond to a request for consultation by western countries within the World Trade Organization (WTO) framework.

Zhu Hongren, chief engineer of the Ministry of Industry and Information Technology (MIIT), reiterated that comprehensive measures to regulate China’s rare earth industry, including production caps, export quota cuts and stricter emission standards, are in line with WTO rules.

He said China’s regulations are created after fully considering the ability of the environment to ensure effective supplies of rare earth metals. Zhu added that China is willing to cooperate with foreign companies in recycling rare earth metals and developing substitutes for the metals. Read more here.
 

(Mary Swire — Tax-News)

Following last month’s request by several countries for consultations at the World Trade Organization (WTO) on what they consider to be China’s unfair export restraints on rare earths, the latter has now set up a regulatory body to oversee their exploitation.

The 17 minerals that make up ‘rare earths’ are incorporated into many high technological goods, including superconductors, hybrid car components (primarily batteries and magnets), flat-screen televisions, mobile phones, lasers and many defence-related products.

China produces over 90% of the world’s rare earths supply, but has pointed out that it only holds around one-third of global reserves. However, there has been growing concern that the world may soon face a shortage, particularly as China regulates its exports by quotas, duties and export pricing requirements, as well as related export procedures and requirements. Read more here.
 

(Reuters – Tom Miles and Doug Palmer)

An unprecedented legal attack on Chinese trade policy may fall short of its immediate goal of increasing rare earth supplies, but it is just one of several battles in a bigger campaign: defense of the old economic order against China.

The complaint brought by the European Union, the United States and Japan – that China is illegally choking off exports of rare earth metals – is the first coordinated litigation at the World Trade Organization by three of the four top trading powers against the fourth.

Long an unloved constituent of specialist commodity markets, rare earths have burst into prominence as irreplaceable inputs for a range of hi-tech products, from iPads to wind turbines, hybrid car batteries and precision-guided weapons.

The fact that China’s exports plummeted just as demand took off cannot be a coincidence, its accusers say, and they are confident they have a watertight and well-documented case.  “We met at least a half a dozen times with the other countries that joined us. And I’m not talking about ‘howdy dowdy’ kind of meetings. These were three and four day-long sessions of going through legal issues,” one U.S. official said.  “Literally thousands of pages of Chinese language documents needed to be found, translated and analyzed.” Read more here.
 

(New York Times – Keith Bradsher)

A month after Vice President Xi Jinping’s visit to the United States and Europe, the brief trade policy détente between China and its two biggest export markets is about to end.  Five separate issues — involving auto parts, cars, solar panels, anti-subsidy laws and rare earth metals — are all likely to see action by American officials, European officials or both, starting as soon as this week.

On Tuesday, in fact, the United States, the European Union and Japan filed a formal “request for consultations” with China at the World Trade Organization about Chinese restrictions on exports of rare earth metals. President Obama was scheduled to personally announce the move, a senior administration official said. Such a request is the first step in a process that will lead to a full-fledged legal case at the WTO by early summer unless China unexpectedly agrees to the West’s demands to ease the export of rare earths — materials vital to various sophisticated technologies. Read more here.
 

(Nuclear Engineering International)

The governments of Canada and China have completed negotiations on an agreement that will facilitated increased exports of Canadian uranium to China, according to Canadian prime minister Stephen Harper.

The agreement is a Protocol which supplements the Agreement between the Government of Canada and the Government of the People’s Republic of China for Co-operation in the Peaceful Uses of Nuclear Energy of 1994.

“This agreement will help Canadian uranium companies to substantially increase exports to China, the world’s fastest growing market for these products,” said Harper. “It will generate jobs here at home while contributing to the use of clean reliable energy in China. Read more here.
 

(Reuters – David Stanway)

A World Trade Organisation ruling against China’s restrictions on raw material exports could force changes to some of its rare earth policies but is unlikely to yield the boost in exports of the metals that consumers want to see.

A WTO panel decided on Monday that China had violated global trading rules by curbing exports of raw materials like bauxite, coke, magnesium, manganese and zinc, which inflated prices and gave domestic Chinese firms an unfair competitive advantage.

Rare earth metals were not part of Monday’s ruling, but users of the crucial group of 17 elements used in the renewable and high-tech sectors hope China will also scrap export limits on these commodities, leading to higher volume and lower prices.

They are likely to be disappointed.  “It is still too early to say what the impact will be but I can’t see it having a big impact on prices – the main issue will still be supply and demand,” said Vivian Pang, an analyst with the Asian Metal consultancy in Beijing.   The reason, say analysts, is that even if China removes export quotas, it is unlikely to lift its production limits, which are meant to limit environmental damage from rare earths mining and keep prices – and profits – high. Read more here.
 

(Industry Week – Agence France-Presse)

Ruling affects bauxite, coking coal, fluorspar, magnesium, manganese, silicon metal, silicon carbide, yellow phosphorus and zinc

The World Trade Organization on Jan 30. upheld its ruling that Chinese restrictions on key raw material exports broke trade rules following an appeal by Beijing. China must bring its duty and export quota measures on elements including magnesium and zinc into line with its WTO obligations, an appeal body said.

The WTO found in favor of the United States, European Union and Mexico in July following a complaint that China had failed to meet the promises it made when joining the body.

The ruling applies to bauxite, coking coal, fluorspar, magnesium, manganese, silicon metal, silicon carbide, yellow phosphorus and zinc – many of them vital to the chemical and metal industries for producing things like medicines, fridges and juice cans. Read more here.

Related: WTO Appellate Body Report