By Adam Currie — Exclusive to Rare Earth Investing News
A change in mindsetWithout some form of structural change, or at the very least a moderate ramp up in production from countries other than China, the Asian giant will continue to exert its dominance in REE exports. It is this dominance that is allowing China to maintain such high levels of trading leverage, and prompting many to ask: is an incident such as the WTO investigation exactly the prompt to rethink its industrial strategies that the market needs? Soaring rare earth prices based on one country's export abilities are forcing companies around the world to look into diversifying supply sources, while international efforts to find new supplies also seem to be gathering momentum. According to recent reports, an increased wariness about China's monopoly on rare earth has reinvigorated financial support for new rare earth mines, including efforts by US entrepreneurs seeking to obtain financing to reopen Molycorp's (NYSE: MCP) Mountain Pass mine, and attempts in Japan to fund new mining ventures in Australia, Kazakhstan, Mongolia, and Vietnam. The first signs of legislative debate were seen recently when Lisa Murkowski , the Senator of Alaska, announced that the answer to once again creating an independent market is to increase US development of rare earth mines and refineries. She has introduced legislation that she claims allows the designation of rare earth sites as “critical to US strategic interest.” Murkowski commented,“[t]he president wants to sue the Chinese for something that we could - and should - be producing for ourselves,” before adding, “[a]ll he has to do is look north to Alaska, which has already identified roughly 70 rare earth elements sites.” She has also, with the support of many within the REE sector, criticized the current government for not paying enough attention to her Critical Minerals Policy Act of 2011, which has been languishing with the senate Energy and Natural Resources committee since last year. The move to look beyond China as a means of supply has not been limited to the US. Other countries are also beginning to step up policies in retaliation of what they consider to be a monopolized market.
Japan, the world's largest importer of rare earth, announced last month that it will provide five billion yen ($65 million) in subsidies for projects that reduce the need for REEs as it attempts to cut its reliance on imports.According to a statement from the Ministry of Economy, Trade and Industry, funds will be made available to support projects that reduce the consumption of magnetic products that use dysprosium and neodymium, improve recycling, and develop new technologies. Securities Disclosure: I, Adam Currie, hold no direct investment interest in any company mentioned in this article. Could Investigation into Rare Earth Quotas be Just What the Market Needed? from Rare Earth Investing News