Chinese minerals export reduction increases costs

21 June 2011

21 June 2011 | Angeline Albert

Buyers face higher prices for minerals used in phones, televisions and nuclear reactors, following China’s efforts to minimise its export of Rare Earth Elements (REEs).

China produces about 97 per cent of the world’s 17 REEs, but the government’s drive to decrease its export of these minerals, increase its own consumption of REEs and shutdown any illegal or environmentally dangerous rare earth mines that operate within the country dramatically raised prices in June.

The price of the REE known as europium oxide, used to give the red colour to digital colour screens in phones and televisions, has more than doubled in a fortnight. Since the start of June, the price rose from $1,260/kg (£777/kg) to a high point of $3,400/kg (£2,099/kg) two weeks later, according to minerals intelligence provider Industrial Minerals.

The company, which provides daily REE prices, confirmed that the price of dysprosium oxide, used to make magnets for hard disks, wind turbines and military devices, more than doubled from $700/kg (£432/kg) to a high of $1,500/kg (£925/kg) during the first two weeks of June.

REEs are also used in the catalytic converters of vehicles, in small X-ray devices and in lasers used to treat conditions such as glaucoma and cancer.

A report published in June by market research firm SBI Energy said: “REEs are found in abundance worldwide but, to date, only a few deposits have been found with sufficient REE concentrations to make mining them economical.”

The Chinese government’s efforts to stockpile REEs began in 2010 as part of its desire to meet its own needs.

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