November 2, 2010

Reuters reports that smuggling of rare earths is a booming industry. According to an article by Lucy Hornby, China's Ministry of Commerce estimates that 20,000 tons were smuggled in 2009, and 2010 could see a 50% increase to 30,000 tons. For comparison, the export quota for 2010 is 30,258 tons.

In an interview, Tiger Pan (Managing Director of Asian Metals) said, "The price of an export permit used to be cheap, but now it's really expensive -- expensive enough that some companies would rather sell their quotas, because you can make more than by exporting."

Read the article here:

http://www.reuters.com/article/idUSTRE69S06F20101029

Calls on the President and Congress to take Immediate Action

October 20, 2010

(WASHINGTON) - Rep. Mike Coffman (R-CO) issued the following statement after media reports surfaced that the Chinese government was halting exports to the United States of critical rare earth metals:

“Reports that the Chinese government has expanded its rare earths embargo, blocking shipments to the U.S. and announcing it will cut exports of these critical materials by up to 30 percent next year as retribution for currency and trade disputes are extremely disturbing.  It is absolutely critical to our national security that the president and this Congress take immediate action to protect U.S. interests.”

“In the short term, it is incumbent upon the president to make this a national issue and ensure our national security interests are not beholden to the Chinese.  As a long term solution, I am reiterating my call that Congress immediately pass the RESTART Act.  The looming crisis can be averted, but America must act now.”

“Every day that passes without the U.S. taking significant action to restart a domestic rare earths industry, our national security is placed in greater jeopardy and we become further beholden to a nation that time and time again shows they are not a reliable ally or trading partner. Make no mistake, the threat that reliance on China for rare earths poses to both U.S. economic and national security is real.”

Coffman is the author of H.R. 4866, Rare Earths Supply-Chain Technology and Resources Transformation (RESTART) Act.   Coffman previously introduced legislation included in last year’s defense authorization bill requiring the Comptroller General to determine the extent to which specific military weapons systems are currently dependent upon rare-earth materials and the degree to which U.S. is dependent upon sources that could be interrupted or disrupted.  That report was completed in April of this year and the Department of Defense is currently undertaking their own study, due to be completed in the coming weeks.

Read the original here:

http://coffman.house.gov/index.php?option=com_content&view=article&id=366:october-20-2010-coffman-slams-chinese-for-rare-earths-freeze&catid=36:latest-news&Itemid=10

October 31, 2010

According to a recent Bloomberg report, the US Department of Defense study has claimed that China's monopoly over Rare Earths poses no threat to national security. Apparently, rising prices and supply uncertainties are spurring private investment in new mining operations outside of China that will help meet American military needs, which require less than 5 percent of U.S. rare- earth consumption.

While the US military uses only a small fraction of the world's rare earths, it will take time for industry to correct the vulnerabilities in the supply chain, and government support will be necessary.

In the Bloomberg report, Chinese leader Wen Jiabao pledged to supply Japan with rare earths in a meeting in Vietnam. He made the statement during a meeting with counterparts from Japan and South Korea.

In response to the Department of Defense study, TREM10 keynote speaker Congressman Mike Coffman said that the Department is being "myopic". In a phone interview, Bloomberg reports that he said “It’s a very myopic view and it’s certainly not looking at the economic security of the country. It’s only looking at the Department of Defense.”

October 29, 2010

The British newpaper, the Daily Telegraph, reports that a representative of the Chinese Ministry of Industry has denied intentions to leverage the country's strategic monopoly over rare earths.

“China will not use rare earths as a bargaining tool,” an industry ministry spokesman told a press conference, “China hopes to have mutually beneficial cooperation with other countries on the use of rare earths... and at the same time protect a non-renewable resource.”

However, according to the Telegraph, a recent article in China’s ministry of commerce's The International Business Daily magazine, urged China to stand strong in the “rare earth wars” and resist calls from the “big powers” to relax quota restrictions.