By Adam Currie — Exclusive to Rare Earth Investing News
China sent shock waves through the market in 2010 when it imposed export quotas on all REEs. The announcement resulted in increased concern throughout the manufacturing sector, and has led to capital being channeled into non-Chinese companies with REEs as a primary focus.Move not surprising The move by the Japanese manufacturing sector to seek REE recycling methods is not surprising considering it is part of an alliance with the US and EU, all of which moved in on the World Trade Organization (WTO) to challenge China's restrictive export policies for the metals. Until now auto manufacturers have had to rely heavily on rare earth, with more and more examining alternatives to reduce quantities used, or replace REEs altogether. To consolidate its rare earth industry, China recently created a 155-member association which it hopes will regulate production. Honda has also confirmed that it plans to further expand the recycling of REEs in the future, as the newly-established process enables the extraction of rare earth metals from a variety of used parts in addition to hydride batteries. Reasoning behind the move While the shift to this type of recycling might be hailed as noble from an environmental perspective, many will be all too aware that it is a clear indication that Japan wants to shift away from a market that it considers to be unfairly controlled by China. However, China has hit back by suggesting that its steps to regulate the industry are in line with WTO rules and are meant to protect the environment. In response to the recently announced investigation, the country's top industry regulator underlined that "China will respond in this case." In a public address, Zhu Hongren, chief engineer of the Ministry of Industry and Information Technology said: "All these measures, such as export quota controls, are meant to diminish environmental risks that have resulted from the disorderly development of the rare-earth industry,” adding that not regulating the sector will bring more harm to the environment. "China isn't manipulating the prices of rare earths, and only half of its (export) quota was met last year," he pointed out.
As reported by a Chinese media source, Zhang Anwen, deputy secretary of the Chinese Society of Rare Earths, stated that other countries' requests are "unreasonable," and that the increasing prices of REEs reflect market conditions.Zhu said China's regulations, which include production caps, export quotas, and strict emission standards, were adopted after a full consideration was made regarding "the ability of the environment to ensure effective supplies of rare-earth metals." According to the ministry, processing one metric ton of rare earth produces approximately seven tons of strong acid. "The recovery rate for rare earths is less than 50 percent," he added. "In some illegal mines, the rate is as low as 20 percent. So if we can't control and manage illegal activities, there will be significant damage to plant life and underground water supplies." Securities Disclosure: I, Adam Currie, hold no direct investment interest in any company mentioned in this article. Honda Announces World's First Mass-Production REE Recycling Process from Rare Earth Investing News