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BEIJING, China is considering issuing export quotas for rare-earth alloys in a bid to further regulate the exports of the minerals used in a variety of high-tech industries, a person close to the discussion of the plan said Tuesday.
China is also considering separate export quotas for heavy and light rare earths in a bid to better manage exports of such materials, the official said.
Officials have talked before about adjusting the quota system, and there is no sign a decision is imminent. But the government’s current consideration comes as the rare-earths industry and China’s dominance of itâis under greater international scrutiny than ever before.
Currently, China issues a single quota for rare earths, comprising 17 elements that are usually categorized into two kinds, giving exporters more incentive to ship the more precious and lucrative heavy rare earths overseas for higher returns.
The new plans involving alloys and separate quotas for heavy and light rare earths, if finalized, would mean even stricter control by Beijing on the resources as it closes potential loopholes for exporters to sidestep regulations.
Beijing has been slashing annual export quotas for rare earths in recent years, a move that has led to increasing frustration among overseas buyers for the material widely used in high-tech batteries, mobile phones and defense products.
Global buyers have argued that China has taken undue advantage of its position to raise prices and to leave technology companies little choice but to locate in the nation.
China, which supplies around 95% of the world’s rare-earth metals, has so far yet to set any quotas to limit exports of rare earth alloys, despite its controls on the export of raw metals.
The official close to the discussions didn’t say when the plan might be finalized, nor how the talks have proceeded.
The Ministry of Commerce declined to comment. Officials at the Customs Office weren’t immediately available for comment.
Industry officials said Tuesday that China has already stepped up scrutiny of rare-earth alloy exports in recent months as overseas demand remains strong, which has led to rampant smuggling.
“Exports of alloys that contain more than 10% rare earths must be reported to the Customs offices for stricter scrutiny, though China hasn’t issued an official notice on this matter,” said an official at a company based in the resource-rich Jiangxi province.
The Ministry of Commerce said Tuesday it will cut its quota on first-half exports of rare earths by around 35%, after having slashed the export quota by 72% for the second half of this year.
In another measure to curb rare-earth exports, China said it will raise export duties next year on neodymium.
The government also will start to levy export duties on six more rare-earth metals, rare-earth fluorides and rare-earth chlorides, in addition to existing tariffs ranging from 15% to 25% on roughly 30 types of rare earth primary products.
China has also decided to start levying an export tariff of 25% next year on alloys with more than 10% rare-earth content, according to information on the Ministry of Finance’s website.
The plan to set export quotas for rare-earth alloys has caused concern among some exporters.
Two officials from an exporter based in southern China said they hope the planned quotas are imposed on only a limited number of products, such as those with more than 30% rare-earth content, adding that otherwise their business would be significantly hurt.
Washington, Dec 24 (DPA)
US trade officials Thursday threatened trade action against China over exports of rare earth materials, one day after embarking on a separate case before the World Trade Organization (WTO) against wind power subsidies.
The office of the US Trade Representative (USTR) also accused China of a ‘troubling trend’ towards state intervention into its economy in recent years, according to an annual report to the US Congress on China’s compliance with the WTO’s rules.
The USTR said the US and other trading partners have expressed concerns over China’s limits on exports of rare earths that are found almost exclusively in China and are demanded by technology companies. ‘But to date China has not been willing to change its policies,’ the USTR wrote. The US would continue ‘vigorous engagement with China on this issue and will not hesitate to take further actions, including WTO dispute settlement, if appropriate’.
The warning comes after Trade Representative Ron Kirk Wednesday said the US was launching its first action against China over clean energy. The US began formal consultations before the WTO – the first step in a trade case – over what it considers illegal subsidies for wind turbine manufacturers in China.
Economic relations between the two global powers remain strained as trade has grown in past years. The US exports more goods to China than any other country outside of North America, but President Barack Obama has pushed for more liberalization in China by stepping up action before the WTO since he entered the White House in early 2009.
The USTR praised China for taking actions to liberalize its economy since joining the WTO in 2001. But those efforts ‘began to slow’ in 2006, and China had yet to implement all its commitments under the WTO. The result was that China sill maintained ‘industrial policies that rely on excessive, trade-distorting government intervention intended to promote or protect China’s domestic industries and state-owned enterprises’.
Tue, Dec 21, 2010
By Michael Montgomery
The attention brought to the tantalum market in 2010 came from human rights groups, and the US government passing the “Conflict Minerals Act” as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The hope of the human rights campaigns is that by forcing manufactures to disclose the use of conflict minerals in products the reputation of the manufacture is at stake. With the growing social and environmental consciousness of consumers worldwide, the goal is to provide transparency so that these consumers can choose products that do not fuel these human rights abuses. With the attention brought to the market, investors are seeking reputable mining companies. As a result a strong physical demand has increased the price of the metal.
The effort to create a tracking system and control the situation on the ground, the government of the Democratic Republic of Congo halted all mining operations in the region in September of this year. ITRI, an organization of major tin producers and smelters, has been charged with creating the supply chain tracing system. The system will take some time to implement a system that will fully oversee the sourcing off these minerals from the numerous small mining operations in the region. The bill passed by the US requires this to be completed in a very short time frame, with a start date set for March, 2011.
Shortly after the passing of the bill, Chinese suppliers of the metal, and manufacturers of electronic goods were reported to be searching out all non-Congolese supplies of tantalum. Someone purchased 75 % of Brazil’s output for $80, this after rejecting material from the conflict zone of the Congo, reported Metal Bulletin, adding the customer was China’s Ningxia Non-Ferrous.
The supply chain for tantalum was already stretched thin before the reduction of supplies coming from Africa. Congolese tantalum represents about 15 percent of the entire market, which is dominated by Brazil and Australia. The reduction in supply from Africa stretches the supply even thinner. Prices have been steadily rising for the metal in demand, stemming from increased demand for high tech electronic goods. The desire for these products is not likely to subside anytime soon, which should drive this market in the future.
Tantalite ore prices remained fairly constant at $40 per pound from 2007 into 2009, but starting midyear 2009 prices began to increase dramatically. In less than a year, tantalite ore prices more than doubled with the prices for Q1 2011 now coming in at $120 per pound and spot prices expected to touch $150 per pound,â stated Mary Ellen Bauchman, TTi Insights. TTi is an electronics manufacturer; these prices represent what suppliers pay for the materials.
Physical demand will continue as tantalum is irreplaceable in many of the high tech electronic products. The increase in demand from a rapidly urbanizing China alone will grow the consumer electronics market, putting added pressure on already thin tantalum supply. Acer, the world’s second largest PC vendor, expects PC revenue would grow 10-15 percent next year, driven by growing demand from China and emerging markets, reported Ken Wills, for Reuters.
The growth of these markets will fuel the price of tantalum in 2011. When coupled with the move away from tantalum sourced in Congo, the outlook for tantalum mining firms is strong. The outlook from tantalum consumers in the US is for dramatic price increases in 2011. Bauchman added, The DRC “Conflict” region supply will effectively be taken off line on or before 3-31-11 thus reducing the overall available supply by 16% Tantalum demands will continue to increase driven by upside of needed components for wired communications equipment, laptop computers, 4G hand phones and other newer technology electronic components, she went on to say that, âIn the near term these manufacturers will have to replenish their supplies at current market prices of more than 2X their old cost structures resulting in large tantalum capacitor price increases.
20 Dec, 2010, 02.45AM IST, Vivek Kaul and Prashant Mahesh,ET Bureau
Silver: Brighter future than gold?
You’d probably laugh it off if someone claimed silver is the hottest metal, given gold’s runaway prices. Since the beginning of the year gold is up about 20%. Silver, in the same period, has given a whopping 60% return. “This relative outperformance will continue,” says Vijay Bhambwani, CEO, BSPLindia.com.
Silver price is at a 30-year high of $30 an ounce (Rs 45,665 per kg). Let us do a quick analysis to find out if you should invest in it.
Riding on high demand: Silver has more industrial applications than any other metal. A recent report by Hinde Capital says: “It’s the best conductor of both heat and electricity, the most reflective, and second-most ductile and malleable element, after gold.” The white metal is also being put to several new uses-water purification, air-handling systems and a natural biocide.
“New products using silver’s biocidal qualities are being developed each year; clothing, bandages, toothbrushes, door-knobs (flu-protection), keyboards, the list goes on,” Hinde Capital report points out.
On supply side, things are grim: Silver analyst Theodore Butler at Butler Research says, “Silver inventories are down from 10 billion ounce in 1940 to 1 billion ounce today. Gold inventories, in contrast, are up 4 billion ounce since 1940, according to World Gold Council.” The world has five times more gold than silver, he says. Though this may be extreme, it’s true that silver will soon become scarce. Jeff Nielson, editor, Bullionbullscanada.com says he would side with a more conservative 6:1 gold silver ratio. “This is small enough, given the 47:1 price ratio.”
Also even though the earth’s crust has 17.5 more silver than gold, production of silver cannot be ramped up overnight. Almost two-thirds of the silver that is mined comes as a byproduct from mining of metals like copper, lead and zinc. So it isn’t easy to ramp up production straight away. Data from the silver institute suggests silver mine production rose 4% to 709.6 million ounce in 2009.
No recycling of silver: Silver recycling isn’t always possible primarily because it is used in very small quantities as an industrial metal, and not always monetarily viable to recycle. Even at its current price, recycling doesn’t make sense. As Nielson pus it, “We must remember that virtually all the gold in the world has been conserved (recycled) because it’s high value economically justified recycling. So, may be when silver advances to somewhere between $50 and $100 an ounce, we should start to see much more recycling.”
High price in short and long term: Mismatch between price and demand makes silver a great long-term bet. “For most of the last 5,000 years, gold silver price ratio averaged 15:1. The current ratio of over 45:1 is unjustified and unsustainable,” says Neilson. The logic behind this is that silver is roughly 17 times more plentiful than gold (though its supply is rising at a lower pace). So with current gold price at about $1,400 an ounce, silver should be around $93 an ounce. That’s nearly three times silver’s current price. If market corrects this ratio and silver price rises to this level, it’s a huge bounty for investors. As Butler says, “I’ll be amazed if we don’t climb past $100 an ounce in the next three to five years. The amazing thing is, despite silver [prices] being up five times from its lows of about $4 an ounce, the current investment thesis is better than ever. That’s because silver is getting greater investor awareness.”
Prospects are high in the short term too. “In the next couple of months, silver could trade between Rs 46,000 and Rs 47,000 a kg,” says Rakesh Varasia, research officer, Indian Bullion Metal Association. “Inventories are so severely stressed that the next spike in 2011 will most likely take silver to or above $50 an ounce (about Rs 75,000 a kg),” adds Nielson.
Gold goes up, silver follows: Gold prices have been going up for a while given countries around the world either printing money or threatening to do so, leading to investors betting on gold. “Relentless debasing of fiat currencies will inflate gold further,” says Bhambwani of BSPLindia.com. His views are echoed by Ritesh Jain, head, fixed income at Canara Robeco Mutual Fund. “Silver is seen to be a poor cousin of gold. If gold prices rise, silver will follow closely,” he says.
How to buy silver: The simplest way is to buy silver is through silver exchange-traded funds. But they’re not available in India. You can always buy bars and coins but storing them can be a problem. The most practical solution is to buy e-silver. E-silver was launched recently by National Spot Exchange. This is similar to buying shares and holding them in a demat form.
National Spot Exchange has 370 brokers and 40 depository participants (DPs) empanelled on it. All you’ve to do is approach your broker and sign a client registration form, one-time cost of which is Rs 100. Annual depository maintainence charges could be between Rs 300 and Rs 600 a year.
Whenever you transact, the brokerage charge is between 0.25% and 0.50%, and depository transaction fee is Rs 25-50 per transaction. For physical delivery of the metal, you have to pay Rs 200. Currently silver is delivered at National Spot Exchange centres in Delhi, Mumbai and Ahmedabad.
But even in this case, investors need to be careful not bet all their money on silver. “Since silver is a volatile commodity, retail investors should invest through the systematic investment plan route,” says Karun Verma, senior research analyst, Religare Commodities.
Is the air leaking out of the buoyant cleantech sector? We’ve been hearing such chatter for months, but Dallas Kachan of the consulting firm Kachan & Co. is out with a forecast that says not to worry: 2010 was a glorious year for cleantech investment and more of the same is on tap for 2011. Kachan says that there are simply too many factors driving venture capital into the sector.
We predict these drivers particularly the real or perceived scarcity around oil, rare earth elements and other commodities will be felt even more acutely in 2011, especially as the Chinese middle class expands, further cementing the demand for and the market validity of clean technologies, Kachan, managing partner of Kachan & Co., says in a press release.
Kachan says one notable feature he expects in 2011 is a return to early state venture investments as government grants and loan guarantees begin to fade. Venture investment in cleantech will return to what it does best: seeking out emerging early stage technologies and teams that promise good multiples, and will be less influenced by governments putting large amounts of capital to work themselves, Kachan says.
The subcategory getting the most attention, he says, will be efficiency, which Kachan said began to get serious traction in 2010 with big announcements, investments and acquisitions by GE in the third quarter and energy-efficiency plans unveiled in recent weeks by Russia.
“The significance of the modules tested at NREL is that they’re all done on the product line,” said Stephen Barry, vice president of corporate development at MiaSolé.
The news, he said, comes on the heels of MiaSolé’s announcement of modules rated at 14.3 percent efficiency in September 2010. The goal is to achieve a CIGS module that is as efficient as the most powerful CIGS cells tested at NREL,
“We believe there’s more headroom there [for efficiency increases],” he said.
“This is a very exciting result, especially when it comes so soon after the previous 14.3 percent achievement from last September,” NREL solar researcher Dr. Rommel Noufi said in a press release. “An almost 1.5 percent absolute increase in efficiency in such a short time on a continuous roll-to-roll manufacturing line is impressive and demonstrates good process control and a validation of the MiaSolé approach.”
At present, because thin-film PV is behind crystalline silicon PV in terms of efficiency, it need more space to produce electricity. Therefore, most thin-film PVs available today are being used in large-scale applications like commercial warehouses and solar farms and not for residential purposes. As firms like MiaSolé close that efficiency gap, they will likely become more suitable for residential installations. Barry realizes this and said that the application of their product will change as they gain ground with efficiency.
Thin-film PV also allows for more flexibility in design and use.
For instance, MiaSolé’s modules are deposited on a flexible steel substrate, which makes them physically flexible, something that crystalline silicon panels can’t achieve. However, at present, they’re encapsulated in glass, Barry said. But the company has an active building-integrated PV program, he said. And in the future, its PV materials could take the form of roofing for instance.
Don’t expect the 15.7 percent efficient module on the shelf at your neighborhood PV store tomorrow, however.
“We have our MR-107, a 10.5 percent efficient module,” said Barry. “We’re shipping those now in volumes. We have submitted to UL a 13 percent efficient module.”
He said the 13-percent efficient modules will be in production in the second quarter, and couldn’t estimate when the new, more powerful modules would reach commercial availability.