China has released the total mining output quota for 2011. The country has increased the level of the total by a modest 5 per cent over 2010. Along with the announcement officials stated that new permits for prospecting and mining will not be granted until June, 2012, which further exacerbates supply issues going forward.
The stunning 72 percent reduction of rare earth export quotas and other changes to trade policy in July, 2010 shined a spotlight on the rare earth market. Prices for the various elements skyrocketed, and share prices of junior miners exploded. China has stated that export quotas are being determined once again, and the world anxiously waits.
Russia is home to the second largest deposits of rare earth elements in the world, yetthe nation produces almost no rare earth. Two Japanese companies are looking to deposits in Russia as a saving grace for new supply. Also former Soviet satellites have deposits of their own and Germany and other western companies are looking to cash in.
China’s pollution problems are well documented, and the government has started to show a desire to act on them. The Chinese control 97 percent of the rare earth supply, which is needed for numerous sustainable energy technologies. China could be in the driver’s seat of a new green economy selling not only rare earths, but finished sustainable energy technology.
Prices may be on the move for rare earth elements as China restricts export quotas by 72 percent. Controlling 95 percent of the world market, the drastic reduction to exports will choke the supply of the materials for world consumption. Also, the Chinese are considering making a transparent, negotiation based pricing system.
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