Rare Earth: Calls for "reasonable" pricing

Commodity prices will also be troublesome for traders. In the Sino-US rare earth trade dispute case, the WTO panel concluded that China’s implementation of export taxes and export quotas on rare earth products violated established rules. China An appeal was made to show that the export control was for resources and environmental protection, and it tried to use the general exception clause of Article 20 of the General Agreement on Tariffs and Trade (GATT) on environmental protection. How to price rare earth products in order to promote the industry in the production, processing, trade and other aspects of the healthy development?

“Wonderful and inexpensive” troubles Zhang Anwen, deputy secretary-general of the Chinese Rare Earth Society, said in an interview with the International Business Daily that after the mid-1980s, the United States was the main source of rare earth resources, including several other countries. The pattern gradually became mainly based on China's supply. China's reserves, which account for 23% of the world's rare earths, have met more than 90% of the world's demand, reaching a maximum of 97%.

This change in supply patterns is undoubtedly related to the low price of Chinese products. However, according to Zhang Anwen, behind Wumart is China’s advanced mining, selection, smelting, and separation technologies, and “cheap” reflects the fact that the sales price is lower than the cost price due to the disorderly production and export, and the protection of resources. The basic costs that are required to bear on environmental and ecological aspects are even beyond the reach.

Each ton of rare earth produces hundreds of tons of waste residue, causing serious pollution to water and soil. According to the US Environmental Protection Agency (EPA), rare earths in the processing process can cause surface water and groundwater to be contaminated by heavy metals and radionuclides, and the use of concentrated acid for leaching of rare earths will make the soil near the mining area no longer suitable for cultivation. “In other countries, the high cost required for environmental pollution control of mineral extraction, selection and smelting has caused some projects to stop production, and these countries have changed from rare earth exporting countries to importing countries. The United States Mountain Pass Mine, Australia Weld Mine All are rich reserves of rare earth mines, only in the past two years to resume mining. Russia, India has greatly reduced the amount of exploitation over the years.” Zhang Anwen told reporters.

Many people in the industry believe that the price of domestic rare earth is extremely unregulated, resource taxes, sewage charges, etc. are not included in the cost of rare earth market prices can not reflect its strategic importance.

Establishing a scientific pricing mechanism Appellant obviously refuses to pay for environmental pollution caused by rare earth production in China. The United States "International Financial Times" (IBTimes) March 27 quoted a Princeton University professor of international economics, said that "the export of products and environmental pollution is completely irrelevant, resulting in pollution is the production process of rare earth, rather than exports." "Controlling whether China's rare earth exports can reduce its domestic production of rare earth minerals is uncertain, because China itself is also consuming rare earth products," said the "International Economic Times."

This view of the United States is not groundless. It is understood that the ratio of China's rare earth product exports to domestic consumption is about 1:4. “According to the principle of whoever pays the bill, the protection of resources and the environment should be the responsibility of the domestic market, which is the main body of rare earth product consumption,” said Li Qing, a rare earth researcher at My Nonferrous Metals.

Many people in the industry believe that the most important thing for China at the moment is to limit the production and consumption of rare earths in the country so that they are consistent with foreign export standards so that resources can be truly protected and trade frictions can be avoided.

The "six major groups" of rare earths that are widely expected in the industry are considered to be a good starting point for regulating the rare earth market. Li Qing reminded: "After the establishment of a large group, the more important thing is to establish a scientific rare earth pricing mechanism." In his view, a reasonable price should reflect both the status of strategic resources of rare earth, but also in line with international trade rules.