International rare earth production costs will rise sharply, domestic companies are not afraid of foreign mine competition

“Australia and Vietnam’s mines are on the rise, but it’s a good thing for China’s rare earth industry.” A long-time Rare Earth person engaged in rare earth trade is learning that Australia’s Lynas Rare Earth Company has signed a strategic alliance agreement with Japan’s Shuangri Co., Ltd. This is expressed when the annual supply of 9,000 tons of rare earth to Japan is made.

The rare earth industry generally believes that the development and commissioning of foreign rare earth mines will help to raise the overall level of rare earth costs in the international market. Although there are competitors, overall, it is beneficial to China's rare earth industry.

Not afraid of competition in outer mines
According to the agreement between Lynas and Japan, Japan will provide Lynas with 250 million U.S. dollars to accelerate the expansion of its rare earth capacity. As an exchange price adjustment, Lynas will provide up to 9,000 tons per day to Japan in the next 10 years. Rare earth products. According to Lynas's plan, the first phase of the project will be put into operation in the third quarter of 2011. The initial capacity is 11,000 tons/year and the product is rare earth oxide. According to Nick Curtis, executive chairman of the company, the cooperation with Japan will enable the second phase of the project to be started in April 2011 and is expected to reach production in 2012, which will expand the company's annual rare earth oxide production capacity to 22,000 tons.

For the emergence of competitors, China's rare earth industry, especially in the field of smelting and processing, does not seem to worry. According to the aforementioned rare earth traders, the rare earth minerals in Australia and Vietnam that have been developed in the near future in the international market are mostly light rare earths, which are not yet able to replace the heavy rare earth products unique to China. “In general, light rare earths can only be used in some civilian and low-end products, while heavy-duty rare earths are used in military and high-end products,” said an industry insider who is involved in rare earth separation.

Domestic rare earth practitioners seem to welcome the joining of international competitors. The director of a rare earth separation plant said that the mining cost and construction capacity of foreign mines will greatly increase the average cost of production of rare earth products in the current international market, and provide some support for the future price line of rare earth.

Resource tax looming
As the price of rare earth products soars, domestic rare earth export quotas can be found in odd goods. It is understood that the current export quota of 1 ton of heavy rare earth can be sold at a high price of 270,000 yuan. Some enterprises with rare earth export quotas can even make a profit without any production.

In this regard, the rare earth traders mentioned above said that from the threshold of rare earth export qualifications delineated by the Ministry of Commerce, it is almost impossible to increase the number of enterprises with qualifications for exporting rare earth products in the future.

The high-level rare earth prices have simply become "shaky" by relying on export policies. "Although our manufacturers in Chenzhou now agree that 'the current stage is to save money', and do not worry about the price, but in the medium and long term, the current rare earth price is still an effective support for lack of cost." A rare earth person from Zhangzhou revealed that Local governments are looking forward to initiating resource tax collection for rare earth minerals. It is understood that although the resource tax policy for rare earth mineral products has not been determined so far, there is consensus within the rare earth industry. If the country cannot adopt stricter policies on rare earth mines in terms of resource use fees, the future price of rare earths may be The cost support factor is weak and it is once again on the road to sale.

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