EDITOR: | October 23rd, 2013 | 5 Comments

How new REE miners might steal a march on their Chinese competition

| October 23, 2013 | 5 Comments
image_pdfimage_print

braaassHas anyone given any thought to certifying rare earth metals produced from the emerging non-China mines? Silly question, you may say. But is it? And especially if more and more mines get into production and we see surpluses emerging, especially in the lights.

This, and the following thoughts, have been spurred by the news that China is really starting to clean up its rare earth act. The New York Times ran a long report Tuesday (it appears on this website, in the Investor Intel news feed) which goes into the background of how REE mining in northern China has caused contamination to leak underground toward the Yellow River which is, as the newspaper points out, a critical source of water for 150 million Chinese. In Jiangxi there has been illegal strip mining while in Guangdong province rice fields and streams have been destroyed by deadly acid run-off from REE mines.

It appears that the World Trade Organization will today issue its findings on the case brought against China for imposing taxes and export restrictions on rare earths. Most of the NYT’s (as too often) over-long article is concerned with the trade issue and backgrounding its readers on the whole REE saga, a story only too familiar to readers of Investor Intel.

But it is worth noting the points made about the environmental issues. As the paper reports, “whole villages between the city of Baotou and the Yellow River in Inner Mongolia have been evacuated and resettled to apartment towers elsewhere after reports of high cancer rates and other health problems associated with the numerous rare earth refineries there.“

It adds that most of the waste has been dumped into the world’s largest mine tailings pond, which covers four square miles near the Yellow River on the western outskirts of Baotou. “Built in the 1950s under Mao Zedong, the tailings pond lacks a liner to prevent the leaking of radioactive waste and toxins into the groundwater, where they have been gradually seeping toward the Yellow River.”

Efforts have been made by the Chinese, such as refineries being rebuilt at Bayan Obo in the Gobi Desert, although there are still reports of high mortality rates among livestock and deformed babies.

Anyway, to get back to my main point about certifying, what I am suggesting is that as non-China production gets under way, the industry adopts certain standards. Now, yes, China will do more to clean up its act but will it allow outsiders in to check just how environmentally conscious their production in? Probably not. But Western REE producers could; after all, in almost all countries they will have to meet rigorous standards (think Malaysia and Lynas).

This brings me to the next point. The Greens and other environmentally concerned people all use, every day, products containing rare earths, whether it’s the lithium-ion battery in their hybrid car or the dysprosium in their much-adored wind turbines. These lobbies jump on anything that smacks of pollution so far as the rare earth industry is concerned in the West, usually the transport or processing of radioactive materials. But have we heard a whisper of concern about the Chinese REE pollution?

Why not stress to them the consequences of using REE from the polluting Chinese, and why they should favour those elements produced by companies whose processes are transparent?

It will need an international industry body. Nothing flamboyant but a small outfit with sufficient numbers of the rare earth producers and explorers in support to provide a modest budget.

It can be done. All sorts of industries have approval standards.

And, when you think about it, it is an idea that could appeal widely. For example, Greenland looks as if it will be a producer from more than one mine and it takes its “green” image very seriously indeed. End users such as the Japanese might be interested in the image-enhancing angle that buying REE from a monitored producer could bring.

True, we are a long way from the stage where China’s market power is broken and the rest of the world is producing in really meaningful quantities, but it might be best to start thinking about my suggestion, thus heading off the environmentalists who might want to block mines or transport of REE.

The Chinese are vulnerable on this issue. The West has been a REE underdog for a long time. It might be possible to stick Chinese with the environmental equivalent of the “conflict minerals” label that has been so effect in dealing with illegal products of mining from diamonds to tantalum.


InvestorIntel

Editor:

InvestorIntel is a trusted source of reliable information at the forefront of emerging markets that brings investment opportunities to discerning investors.


Copyright © 2017 InvestorIntel Corp. All rights reserved. More & Disclaimer »


Comments

  • Dr. Copper

    Sounds like something Horward Bamsey at GGGI would be interested
    to discuss with you.

    People will make big mistakes if they think that competition is healthier
    than co-operation for the critical minerals.

    October 23, 2013 - 7:42 AM

  • Al

    Great idea Robin!

    Reminds me of the Kimberly process, which was designed to eliminate conflict diamonds in the market place, or at least make an attempt at transparency. Your proposed approach could work very well for rare earths where the over arching concern may be sustainable production vs rampant pollution of the environment.

    Perhaps RETA may wish to be the champion of a new certification process??

    October 23, 2013 - 10:01 AM

  • GoBucks

    The WTO is such a shining success…as is the ridiculous “conflict minerals” (Dudd-Frank) thing.

    All we need is yet another blue-ribbon group to go on expensive junkets.

    Meanwhile, we’re close to taxing and regulating ourselves into the poorhouse.

    How ’bout we tend to our own problems over here?

    October 23, 2013 - 10:40 AM

  • black jack

    well i would be happy with anything if it raised the SP of Lynas

    October 24, 2013 - 6:49 AM

  • InvestorIntel Week-in-Review: Berkwood (+33.33%), Hastings Rare Metals (+26.83%), Texas Rare Earth (+24.38%), & Canada Rare Earth (+14.29%) | InvestorIntel

    […] Its potential uses keep growing – along with the list of companies exploring for it’, ‘How new REE miners might steal a march on their Chinese competition’; and two pieces on Greenland: ‘Greenland opens the door for rare earths (and uranium) – now […]

    October 28, 2013 - 11:28 AM

Leave a Reply

Your email address will not be published. Required fields are marked *