Germany working with Kazakhstan on rare earth deals

German companies are working with its government to develop rare earth projects in Kazakhstan, the Bloomberg cited the Handelsblatt newspaper as saying.

The report said BDI, or Federation of German Industries, had began enlisting companies since late 2010. These companies might take direct stakes in rare-earth development projects abroad, it said. 

The cooperation between Kazakhstan and Germany is similar with that of Mongolia and Japan. In both cases, the poor country is eager to develop its natural resources in exchange for development help and technology know-how. The rich country needs raw materials outside China. 

Here is the Bloomberg story: Germany, Kazakhstan Forging Rare-Earth Pact, Handelsblatt Says

Top hedge fund manager attributes success to rare earth stocks

Canada’s best performing hedge fund manager of the past year won big by positioning on rare earth stocks, according to a story on the Global and Mail.

Steven Palmer, president of Toronto-based AlphaNorth Asset Management Inc, said his company positioned with their biggest weighting in a couple of rare earth stocks such as Stans Energy Corp and Ucore Rare Metals Inc, and they were the star performers.

“The rare-earth stocks were among the winners that helped his fund become the top-performing Canadian hedge fund last year, ” the story said, citing data compiled by Globe Investor.

Palmer prediced that resoruces would have a pullback this year. “By the end of this year, resource stocks will be flat to modestly higher, but returns won’t be as good as we experienced in 2010,” he was quoted as saying. 

Here is the story: 

 Top hedge fund manager turns to tech micro-caps

China’s rare earth strategy criticized at home

        The West might see China’s handling of rare earth as too aggressive. At home, however, the policy is been criticized as being too introvert and passive. 

        An article on the website of the Ministry of Land and Resources started by a dialogue:

        A: Do you know that the Japanese has started to explore rare earth resources in Mongolia, Vietnam and Australia?
        B: That is good. So that they will not over develop the rear earth mines at home. Anyway we have enough for ourselves.
        A: You did not get what I mean. Being the largest producer and consumer of rare earth in the world, with mature geological exploration resources, why don’t we explore rare earth mines around the world, so that we can control it the way the Brazilians and Australians control the global iron ores?

        The article then said China did not try to control global rare earth resources. Instead, the country is used to take the defensive position, even in terms of rare earth, for which it actually has a dominant position.

        The thesis, the article said, is that in the global capital market, the control of resources does not lie on the control of materials or trading channels, it is the capital control of end supply and demand market.

       China’s performance in rare earth resources, according to the piece,  did not break through the status quo of being a resource supplier from the third world. It says that even China controls 70 percent of the world’s rare earth resources, it will not be able to monopolize the market as countries with transnational companies do, such as Brazil (Vale), Australia (Rio Tinto and BHP Billiton)

      The United States, it says, take an opposite strategy: “The US let its own oil sleep on the land of America, and reach its capital all over the world.”

      It ends by concluding that the resource strategy is still too introvert. It does not has the strategy of “managing the earth,” the author cited Mao as saying.

      Here is the article:"We are lacking capital and right thinking"

rare earth smuggling

This info from New York Times is interesting: "Many companies in the West indirectly depend on illegal mining and smuggling. Industry experts estimate that illegal production accounts for about a seventh of the supply of light rare earths in the world and as much as half of heavy rare earths.

Also, I am not sure whether yesterday's story on the ministry's control mean this : "That step removes administrative oversight of mining from provincial and municipal control. "

Anyway, here is the link of the NYT story: "http://www.nytimes.com/2011/01/21/business/global/21rare.html?_r=1&emc=tnt&tntemail1=y

China's national rare earth mining plan

The Ministry of Land and Resources identified 11 rare earth mines as the "national rare earth mining plan." It did not say what does that mean. But given the context, this might be part of the national strategy of integrating the industry, closing small mines and moving up the value chain.

I labelled the 11 mines on this map:


在較大的地圖上查看China National Rare Earth Mining Plan

Here is the link of the ministry's statement: http://www.mlr.gov.cn/zwgk/zytz/201101/t20110117_812188.htm

China’s rare earth export up in 2010

China’s rare earth export actually went up in 2010, despite all the talk about tensions and impact of quota decrease.

China exported 35,000 tons of rare earth from January to November in 2010, up 14.5 percent year-on-year, according to the website of China’s Ministry of Commerce.

Japan, EU, and US are the main export market, taking 86 percent of the overall export, the ministry said.


“China will keep supplying the world market with rare earth, and manage the export quota based on WTO rules,” said Yao Jian, spokesman for the Ministry of Commerce.
Yao said international cooperation will help the rare earth supply. “US, Australia, and some countries in the middle Asia have expanded rare earth production. I think this will help to ease the tension in rare earth supply,” he said at the press conference.

China takes 36 percent of the world’s rare earth reserve and 90 percent of the global supply. In 2010, the export quota decreased by 30 percent than 2009.

“We will further complete the rare earth regulation system in global cooperation, including rare earth export and production policies,” said Yao.

Here is the link for the transcription of the press conference: http://www.mofcom.gov.cn/xwfbh/20110118.shtml

Europe’s rare metal strategy

Europe should focus on mining and recycling of critical metals, instead of stockpiling, as US does, according to a FT report.

The suggestions includes set up a EU policy to protect the bloc’s investment in raw materials abroad. The report also cited Antonio Tajani, EU industry commissioner, as saying that he was eager to deepen co-operation with Africa to improve Europe’s access to raw materials.

I find this line interesting: “The report's recommendations include policies to improve access to primary resources by promoting exploration and ensuring that this is viewed as research activity.”

The report was prepared by an expert group “chaired by the European Commission and set up as part of Brussels’ effort to secure sustainable supplies for the bloc,” the newspaper said.

Here is the FT report: http://www.ft.com/cms/s/0/6522b2b6-78dd-11df-a312-00144feabdc0.html#axzz1BNUk9xhD

I haven’t found the exact report. But here is a EU report on metals:
ec.europa.eu/enterprise/sectors/metals-minerals/.../sec_2741_en.pdf