The First Round Of Chinese Rare-Earth Export-Quota Allocations For 2013

by Gareth Hatch on December 28, 2012 · 7 comments

in China, News Analysis, Rare Earths

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On December 27, 2012 the Foreign Trade Division of the Chinese Ministry of Commerce (MOFCOM) announced the first round of allocations of rare-earth export quotas for 2013, to companies operating in China. A total of 15,499 t of export quotas was allocated in this first round, comprising 13,561 t of light rare-earth (LRE) products and 1,938 t of medium / heavy rare-earth (M / HRE) products (FYI – MOFCOM is showing a total of 13,563 t of LRE products in its announcement, but this appears to be an addition error).

There were no changes to the way that the quotas were calculated this time. As you may recall, the allocation of export quotas for 2012 saw separate allocations for LRE and M/HRE products  for the first time, as well as the allocation of provisional and confirmed quotas depending on whether or not companies had passed new pollution-control standards. The separation into LRE and M/HRE products remains, but there are no distinctions in this announcement between provisional and confirmed quotas. There is also no indication in the announcement, of what the total quota might be for 2013, in contrast to the announcement made a year ago for the first allocation of 2012.

So let’s take a look now at the specific companies that have received quota allocations in this first allocation for 2013. The list is divided into sub-lists for Chinese and Chinese / non-Chinese joint-venture (JV) companies. The two sub-lists are sorted from highest-to-lowest total allocation:

First set of allocations of rare-earth export quotas, issued to individual companies for 2013.
Source: Chinese Ministry of Commerce
Exporting Company: Chinese-Owned Allocation (tonnes)
LRE M/HRE Total
China Nonferrous Import-Export Co. Jiangsu Branch 776 166 942
Gansu Rare Earth New Materials Co. 814 88 902
China Minmetals Corporation* 710 173 883
Grirem Advanced Materials Co. 722 158 880
Leshan Shenghe Rare Earth Technology Co. 624 69 693
Xuzhou Jinshi Pengyuan Rare Earth Materials Co. 550 63 613
Yiyang Hongyuan Rare Earth Co. 581 25 606
Ganzhou Chenguang Rare Earth New Materials Co. 518 68 586
Guangdong Rising Nonferrous Metals Group Co. 492 92 584
Baotou Huamei Rare Earth Hi-Tech Co.** 545 36 581
Inner Mongolia Baotou Steel Rare Earth Hi-Tech Co.** 519 34 553
Sinosteel Corporation 495 54 549
Chalco Rare Earth (Jiangsu) Co. 413 121 534
Ganzhou Qiandong Rare Earth Group Co. 419 101 520
Jiangxi Rare Earth & Rare Metals Tungsten Group Co. 475 5 480
Shandong Pengyu Industrial Co. 422 48 470
Inner Mongolia Baotou Hefa Rare Earth Co.** 421 34 455
Guangdong Zhujiang Rare Earth Co. 75 38 113
Xi’an Xijun New Materials Co. 12 0 12
Ganxian Hongjin Rare Earth Co.* 146 34 180
Exporting Company: Chinese / Non-Chinese JV Allocation (tonnes)
LRE M/HRE Total
Baotou Rhodia Rare Earth Co. 1,090 81 1,171
Zibo Jiahua Advanced Material Resources Co. 671 24 695
Yixing Xinwei Leeshing Rare Earth Co. 576 109 685
Jiangyin Jiahua Advanced Material Resources Co. 533 139 672
Liyang Rhodia Rare Earth New Materials Co. 443 138 581
Baotou Tianjiao Seimi Rare Earth Polishing Powder Co.** 211 11 222
Baotou Santoku Battery Materials Co. 164 13 177
Huhhot Rongxin New Metal Smelting Co. 144 16 160
Sub-Total: Chinese-Owned 9,729 1,407 11,136
Sub-Total: Chinese / Non-Chinese JVs 3,832 531 4,363
Total 13,561 1,938 15,499

* Part of China Minmetals Group, which was allocated a confirmed total of 1,063 t.
** Part of Baogang Group, which was allocated a confirmed total of 1,811 t.

The total quota is allocated to each individual company via a formula that is related to the sales volume and revenues generated by each company in the recent past, in comparison to sales for the industry as a whole.

One company which received quota allocations previously but which is not on the list above is Jiangxi South Rare Earths Hi-Tech Co., part of the China Minmetals Group. This was one of four companies that, according to MOFCOM, needed to be reviewed by the authorities before they were deemed to have qualified to receive rare-earth export quotas. The other three are included in the list above.

Here is a comparison of the quota allocations for the past few years:

Export quotas for the Chinese rare-earth industry (tonnes) Source: Chinese Ministry of Commerce
Year Period Chinese-owned Chinese /
Non-Chinese JV
Sub-Total TOTAL
2009 H1 15,043 6,685 21,728 50,145
H2 18,257 10,160 28,417
2010 H1 16,304 5,978 22,282 30,258
H2 6,208 1,768 7,976
2011 H1 10,762 3,746 14,508 30,246
H2 12,221 3,517 15,738
2012 H1 16,066 5,160 21,226 30,996
H2 6,340 3,430 9,770
2013 H1 11,136 4,363 15,499 TBD
H2 TBD TBD TBD

While there was no mention of an estimate of the total quotas for 2013 in the MOFCOM announcement, there have been one or two rumors circulating from Chinese sources, that the total for 2013 would be about the same as in previous years. However, given the fact that the actual exports of rare earths out of China have been significantly lower than the quota allocations set, the drop in demand for some materials, and the likelihood of new sources of (non-Chinese) supplies of LREs coming onto the market in 2013, there is a distinct possibility that the total quota for 2013 will be lower than those for the last three years.

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1 christina CHen December 28, 2012 at 4:06 pm

Hi Gareth,
Thanks for the info.
Do you have the data for the percentage usage of the quote? In the past I learned that each year the quote was not fully used.
Best wishes for a prosper New Year!
Christina

2 nicolas pietrangelo December 28, 2012 at 4:56 pm

Garth your opinion on the hybrid electrics both gasoline-hybrids of Japan(Toyota etc.) and it looks like the diesel/gasoline hybrids now coming out of Germany(VW and BMW will intro seven new EV models in 2013 alone). I know this will be a mix of both the proven NIMH battery and the highly talked about Lithium technologies whose real world success has been less that stellar across the board-Chevy Volt-Tesla-Fisker for example. These auto intros plus the fact that the Germans now have Varta/Cobasys-Bosch/Ovonic battery-BASF who along with the Japanese(Prime Earth Energy-80% Toyota 20% Panasonic) and their success with the Prius family of cars, how does this SUBSTANTIAL activity influence the rare earth universe especially lanthanum/terbium/dysprosium/and neodynium for both batteries and super-magnets?? Pure electrics have not taken off/plug-in electrics just starting/hybrids-electrics a ROARING success. Only a guess but with new diesel electrics going with synthetic fuels from nat gas and coal 100 plus MPG should be well in the ball park and sooner rather than later. Thanks Nick Harding energy.

3 P. LOGANATHAN December 28, 2012 at 11:19 pm

Dear Gareth,

Thanks for the information on China’s H1 2013 RE quotas. With LYNAS coming on-line in Gebeng, Malaysia, in the same year, would you take a guess and how the LREE prices are going to affected?

4 Jake Q. January 2, 2013 at 10:24 am

Do you have a comparison of H/M vs. Light from 2012 to 2013?

5 Gareth Hatch January 2, 2013 at 10:49 am

@Christina Chen: Happy New Year to you too! We don’t have the numbers for the full 2012 year, but based on preliminary numbers the percentage used was indeed much lower than the quota set, as in previous years.

@nicolas pietrangelo: I’ve always seen the use of REEs in magnet materials (Nd + Pr, Dy) as a much greater driving force for the future development of the sector as a whole, with usage in batteries secondary. Pound for pound, kilogram for kilogram, the electrical machines with the highest power / torque density contain Nd-Fe-B-based permanent magnets. At current and near-term cost projections, these types of machines will almost certainly increase in usage, for all types of electric vehicles. Despite reservations about Li-ion batteries, it seems that many auto makers are determined to keep going with them…

@P. LOGANATHAN: I would expect LREE prices to follow expected patterns should there be an increase in supply to the market – i.e. down. But let’s not forget that we are still 2-3 times higher with these prices than we were just 3 years ago.

@Jake Q: you can compare the data above with those from last year here: http://bit.ly/Rzx3se

6 nicolas pietrangelo January 23, 2013 at 7:37 pm

Well Garth here we are a few weeks hence from questions in Dec 2012 and your response very early part of Jan. and the BOMB that was laid with the Boeing Dreamliner battery fires (2) fires in two different planes and two different functions-electrical storage up front and starter for APU unit in the rear/and now with grounding of ALL 787 planes. Also mentioned in the Cessana Citation Li-ion fire and the 2006 fire explosion at the testing facilities of Securaplane, Tuscon,Az for Boeing again with Li-ion. This rings of the Ralph Nader book “Unsafe at any speed”. Link this with ALL the problems GM/Fisker and others have had with Li-ion in the automotive sector. Who cares about the Lithium wt density of energy storage. Oh I forgot the MULTIPLE cargo planes carrying Lithium batteries in their jumbo cargo bays UPS x (2) 747 jumbos and Air asia 747 cargo disaster in the Pacific. The Lithium based battery will be under EVERBODIES microscope now.

7 nicolas pietrangelo February 1, 2013 at 5:09 am

Again, I will make an attempt on Lithium vs NIMH batteries and the involvement of rare earths in the NIMH. Unless I am misinformed terribly and living in a cave, I think we are witnessing the slow demise of the Lithium based batteries, at LEAST it seems that way in the transportation sector(planes-how much more bad news can occur/cars sales are anemic viz a vie Volt from GM and Leaf from Nissan). In the general press there have been several ref. to replacement of Lithium-ion batteries with NIMH(in particular Prof of Chemistry Donald Sadoway world expert in batteries from M.I.T.). The enormous success of the Toyota Prius program and the recent acquisition of Ovonic battery and Cobasys from BASF and R.Bosch respectively would indicate some very REAL activity in the NIMH sector and the associated major usage of rare earths(lanthanum in particular). The Lithium technologies have been hyped for yrs in ALL sectors, performance/safety have been suspect from the beginning. Now with ENORMOUS SAFETY issues Costs will skyrocket to manage both thermal and electrical issues with battery management systems. And the ever present LEGAL and INSURANCE(I have 40 plus yrs in the medical industry) their behavour is VERY predicable BILLABLE HOURS and RISK MANAGEMENT. Who really cares about weight to power ratio, it will be out-weighed by COST!!!!

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