China’s REE consolidation continues; More pressure on uranium; Myanmar’s big numbers
Co-ordination of China’s rare earth sector has taken another step forward. It has been reported this week that the Shanghai Rare Earth Association is now up and running. It was sponsored by 14 enterprises and the first meeting was addressed by Zhou Minhao of the Shanghai Economy and Information Committee. According to Geng Hongmin, director of the Shanghai Rare Earth Material Development and Application office, the association is aimed at “uniting enterprises and institutions in Shanghai that specialize in the research, development, processing and application of rare earth to promote the development and application of rare earths”.
Last year the latter organisation organised the International Rare Earth Industry Development Focus conference on Hainan Island. Its focus was to study all aspects of rare earth pricing and downstream markets. At the time, the promotion for the conference posed these questions: when will sustainable development of rare earth industry occur? What impact will exert on rare earth industry from China’s rare earth resource protection policy and rare earth industry structure optimization policy? After experiencing ups and downs, what is the road ahead for rare earth industry?
Two months ago Chinese newspapers reported that Beijing was still pursuing its policy of establishing large rare earth companies, the long-awaited consolidation process. Industry and Information Technology vice-minister Su Bo was quoted saying the government would accelerate the formation of such large groups “and continue to crack down on unauthorised exploration and mining“.,
Back in April, too, the Association of China Rare Earth Industry held a conference in Shanghai, and future development of China’s rare earth industry was a major topic there. That month also saw the announcement from Nanchang that a new rare earth production corporation has been formed in Jiangxi province. The state-owned Ganzhou Rare Earth Group was founded through the merging of its key subsidiary Ganzhou Rare Earth Mineral Industry Co and some local rare earth companies, including Longnan Wanbao Rare Earth Co. As the news report at the time stated: “Thirty-six per cent of China’s middle and heavy rare earth reserves are in Ganzhou, which has experienced overexploitation since the end of the 1970s.” Rare earth production in Guanzhou last year was worth $5.44 billion, according to the Chinese reports.
URANIUM and NUCLEAR ENERGY: Two developments that might just make the looming shortage of uranium just that much tighter.
The Asahi Shimbun reports that four Japanese power companies (Hokkaido Electric Power Co., Kansai Electric Power Co., Shikoku Electric Power Co. and Kyushu Electric Power Co.) are planning to apply for permission to restart eight idle reactors. The applications are for the Nos. 1, 2 and 3 reactors at Hokkaido Electric Power’s Tomari nuclear power plant; the Nos. 3 and 4 reactors at Kansai Electric’s Takahama nuclear power plant in Fukui Prefecture; the No. 3 reactor at Shikoku Electric’s Ikata nuclear power plant in Ehime Prefecture; and the Nos. 1 and 2 reactors at Kyushu Electric’s Sendai nuclear power plant in Kagoshima Prefecture.
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Tokyo Electric Power Co. (TEPCO) is also making preparations to apply as soon as possible. The newspaper points out that the eight reactors involved in the applications are all pressurised water reactors. The stricken Fukushima No. 1 nuclear power plant, operated by TEPCO, used boiling water reactors.
Meanwhile (and as reported here by Canon Bryan earlier this week), there must be question marks over the reliability of uranium supplies from Niger following a car bomb attack on a mine there. French nuclear group Areva says it will continue its operations in the Saharan nation. Areva, the world’s second-largest uranium producer, extracts more than a third of its uranium in Niger. An affiliate of Al Qaeda is believed to be behind the attack.
EMERGING MARKETS: Everyone seems to be talking about Myanmar (Burma) these days. The latest is McKinsey & Co which has issued a detailed report on the potential for this country now opening up to the outside world.
The potential is enormous. You have to remember that, under British rule, Burma was one of the wealthier areas of Asia with its timber, agriculture and minerals. Now, after decades of military rule, it is one of the poorest. As the McKinsey report shows, the potential numbers show the potential in stark relief:
* The average productivity of a worker in Myanmar is $1,500 a year, or 70% below that of benchmark Asian countries.
* Average schooling lasts only four years.
* By 2030, Myanmar’s cities will need to absorb another 10 million people.
* By that year, investment needed in the country will be $650 billion, $320 billion on infrastructure alone.
* The country has the potential by 2030 to have a GDP of $200 billion, four times that of today.
* The consuming class now numbers 2.5 million. By 2030 it could number 19 million people.
* There is the potential to create another 10 million non-agricultural jobs.
* And the market available? Well, some 500 million people live on the other side of borders with Myanmar, including the adjacent states of India and provinces of China.
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