Chinese Rare-Earth Export Quotas for H1-2011

by Gareth Hatch on December 28, 2010 · 18 comments

in China, In The Media, News Analysis, Rare Earths

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Earlier today, the Chinese Ministry of Commerce announced the quota allocations for rare-earth exports for the first half of 2011. Unfortunately some of the earlier reports on the announcement got the numbers wrong, so I thought I'd put together a quick summary of what's going on. I've also posted a link below to a short interview that I did a few hours ago on this topic, with the BBC World Service's Newshour program.

The authorities have allocated 14,508 t of rare-earth export quotas to 32 different companies in China, for the first half of 2011. For the same period last year, the allocation was 22,282 t. This amounts to a 35% reduction in allocations when comparing the two periods - although such comparisons are misleading as they do not account for subsequent adjustments to the quota for the second half of each year.

Some news reports have stated that the reduction was 10-11%, but this is incorrect and arises from an incorrect comparison between the numbers announced today for all traders, and the allocation given to Chinese-owned companies only for H1-2010, which amounted to 16,304 t. Foreign-owned compares were allocated an additional 5,978 t for H1-2010 and so the actual total quota for H1-2010 was 22,282 t, not 16,304 t.

There are also two slightly different figures being reported on the quota for H1-2011 - this arises for the inclusion (or otherwise) of 62 t of provisional quota for one particular company, which may receive that allocation in March. Of the 14,508 t of quota for H1-2011, 10,762 t went to 22 Chinese trading companies, and 3,746 t went to 10 foreign-owned companies.

You can click the "play" button below to hear my three-minute discussion with the BBC on the subject of rare earths, the quota announcement and China's dominance of the rare-earths sector:

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{ 18 comments… read them below or add one }

1 mike hockridge December 28, 2010 at 10:12 pm

If given a mine site name how do I find which rare earth metals it produces and the percentage of each?

2 Gareth Hatch December 28, 2010 at 10:16 pm

Hello Mike: it can be a little tricky to find the owners of particular projects – if you’d like to share the name of the project I’d be happy to point you in the right direction. You can either post it here, or email it to me privately at ghatch -at- techmetalsresearch.com (replace the -at- with @ ).

3 archivesDave December 28, 2010 at 11:13 pm

Mike and Gareth,
I would appreciate knowing the name if you feel free to share it.
thnx,
dave

4 Shane Lasley December 29, 2010 at 5:12 pm

Gareth,
Not to downplay the significance of China’s rare earth quotas for H1-2011, but aren’t they a significant increase over H2-2011?
Is there a reason to compare H1 to H1 quotas rather than the previous half a year.
Are H1 quotas typically higher than H2?
It seems that the quality of China’s REE exports are as important, if not more important than the quantity.
Is there any indication of the percentages of the various REEs China plans to export?
Thanks,
Shane

5 GH December 29, 2010 at 7:07 pm

Hi, Gareth,

Thanks for your work on this; you’re making TMR the go-to-first site for correcting the mainstream media’s interpretation of REE news.

I dug around on the english.mofcom.gov.cn site for nearly an hour and never found anything but a vague two-paragraph summary of the new export quotas; is there an english-language public site that has the details about tonnage and company count that you mentioned?

Thanks again!
GH

6 Gman December 29, 2010 at 9:46 pm

Go to one of these links for info on rare earths. I don’t recommend raremetalblog but sometimes they have something decent to say. Usually its a pump for AVL or Quest. Yawn

http://www.stockhouse.com/Bullboards/SymbolList.aspx?s=GWG&t=LIST

http://www.byroncapitalmarkets.com/reports/Great%20Western%20Minerals%20Group%20Ltd%20Note%20(10-27-2010).pdf

7 Brian December 29, 2010 at 10:05 pm

Is there any miner that has a market changing source of heavy rare earths that is financially viable to bring into production in the next five years? I assume the recently announced quotas include heavy REE reductions.

8 Gareth Hatch December 29, 2010 at 11:40 pm

@Shane Lasley: to be honest, the most appropriate comparison to make is full year-on-year, but of course we can’t do that for 2011 yet. The quota numbers issued in the second half of each year are connected to / influenced by the numbers issued in the first half – therefore, it’s not really appropriate to compare H1 in one year with H2 in another. As I said in my original post above, even comparing H1 to H1 and H2 to H2 isn’t all that useful either.

In some prior years the two semi-annual quota numbers have been similar, in others they have been quite different.

There are no indications of any sort of breakdown of specific rare earths being exported, either. Note also that the quotas cover all basic rare-earth-basic compounds – not just oxides.

@GH: There is little explanatory information relating to the quotas in English on the MOFCOM Web site, that I have seen, anyway. There is however a fair amount of additional information in Chinese, and I will shortly be posting some further background to the recent quota announcement that I discovered after asking a Chinese friend to take a look at some pages for me. I will also be posting a list of which companies got which quota amounts, though I believe Metal Pages has also published such a list as well.

@Brian: the recent quota announcement covers the rare-earths sector in a monolithic fashion i.e. no differentiation is being made between individual rare earths, or sub-groupings. I’m not sure how you’d like to define “financially viable” (probably beyond the scope of this reply anyway). There are certainly projects in relatively advanced stages of development that contain significant quantities of heavy rare earths, as a fraction of the overall rare earths present. Those include Dubbo (Alkane Resources), Kutessay II (Stans Energy) Nechalacho (Avalon Rare Metals), Norra Karr (Tasman Metals), Strange Lake (Quest Rare Minerals) and Zeus (Matamec Explorations). There are others too, with lesser grades of heavies, or not quite as advanced in terms of resource definitions.

9 Charlie December 29, 2010 at 11:40 pm

When talking about quotas for a given timeframe, are the Chinese talking about powders of the different elements, finished goods or what?

10 John December 29, 2010 at 11:55 pm

What is the difference between quotas and actual sales? It seems to me that sales are far more important than quotas.

11 Gareth Hatch December 30, 2010 at 12:00 am

@Charlie: they’re talking about the sum total of all exports of basic products such as oxides, chlorides and so on. There is no differentiation made between specific rare earths. They also include now ferroalloys, (e.g. DyFe) which previously were not included in the quotas. I have a seen a list somewhere of the specific compounds that are covered by the term “rare earths” in this context – will see if I can hunt it down and post it to the Web site.

@John: you raise a good point. A short while ago there was a report from the Chinese Ministry of Commerce that said that around 32,000 t of rare earths had been shipped out of China in the first 10 months of the year – compare this to the roughly 30,300 t officially available through the quota system. Also, the H1-2011 numbers were allocated to individual companies partly on the basis of their specific prior sales in the last three years – more on this shortly in a new article.

12 samarium December 30, 2010 at 1:12 pm

it would be nice to have a direct reference for the article on :
Chinese Rare-Earth Export Quotas for H1-2011

13 Gareth Hatch December 30, 2010 at 5:07 pm

@samarium: check out my latest article on the quotas via:

http://bit.ly/eTNxp9

It includes links to specific pages on the Chinese Ministry of Commerce Web site, from which the information was obtained.

14 MH Ting January 1, 2011 at 1:32 am

Hi Gareth,
Just to point out a factual error. Only 31 and not 32 firms will have export permits for H1-2011.

15 Gareth Hatch January 1, 2011 at 1:39 am

@MH Ting: thanks for the note. Per the penultimate paragraph in the article above, if we include Pingyuan Sanxie Rare Earth Smelting Company, which is set to receive 62 t of quota in March 2011 if its infrastructure improvements have been inspected and approved by a local regulatory agency, we arrive at 32 companies.

16 Mike January 5, 2011 at 2:16 pm

Gareth,
When you responded to @Charlie you stated that this was for ‘basic products’. I have been told by magnet suppliers that this quota does not pertain to finished magnets, (machined to shape, plated and magnetized). Is this your understanding that the quota is only for the export of the raw material not a finished magnet or magnet assembly?

17 Gareth Hatch January 5, 2011 at 2:20 pm

@Mike: that’s correct – the quotas do not apply to semi-finshed or finished goods such as finished permanent magnets, or magnetic alloys. It does not apply to assemblies that use such magnets. It is my understanding that the quota applies to rare-earth metals, oxides, chlorides and miscellaneous salts only.

18 constantinos September 2, 2011 at 4:15 pm

What date does China announces about rare elements export for this year 2011.and were I can I get the news

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