WTO Ruling Fails to Alleviate European Concern over Chinese Rare Earth Dominance

Rare Earth Deposits & Mining / Rare Earth Exploration, Mining, Processing, & Uses

Date posted: 02/15/15

China has increased its efforts to limit the illegal mining and export of rare earths -REE. The Government has launched a five-month campaign, which has the specific goal of preventing prices of this commodity from dropping further in prices. Since the beginning of October until the end of March 2015 five authorities are working together to track down and punish illegal and smuggling REE operations. This is not the first time that the Chinese government has tried to tamper with - if not modernize - its rare earth industry, first by trying to rationalize resource management by shifting more control to state mining companies and then by setting production quotas for an ever smaller number of authorized companies. However, none of these measures were able to curb pollution, smuggling and illegal mining in the Chinese rare earth industry. The People Republic has insisted that it holds 23 per cent of the world rare earths reserves even if it is widely held to have 40 per cent of the reserves, addressing 90 per cent of global demand. The United States, Japan and Europe have filed a complaint with the WTO - World Trade Organization - and obtained validation that Chinese production and export quotas limited rare earth supplies for the global market, giving Chinese companies an excessive competitive advantage. However, Beijing has started to comply with the WTO ruling because it is facing internal environmental and social pressure. This should be encouraging news for the various REE mining operations under development In North America, South Africa, Tanzania and even Vietnam or Afghanistan and there no assurances that the new operations will be able to deliver all of the rare earths that are in most demand such as neodymium, dysprosium or europium, among others. Efforts to recycle rare earths have yet to achieve any worthwhile results, which means that the REE challenge continues.