China rare earths supplier suspends production

• Yoorah wrote on 2011-10-22 04:59

  Quote from AP:

  BEIJING – China's biggest producer of rare earths is suspending production for one month in hopes of boosting slumping prices of the exotic minerals used in mobile phones and other high-tech products.
  
  This week's move by Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-Tech might fuel tensions with the United States and Europe. They have questioned Beijing's decision announced earlier to limit exports while it tries to develop its own manufacturers of magnets and other products made of rare earths.
  
  In a statement through the Shanghai Stock Exchange, Baotou Steel said it wants to "balance supply and demand" after prices for rare earths fell amid uncertainty about the U.S. and European economic outlooks.
  
  Rare earths are a group of 17 minerals used in manufacturing flat-screen TVs, mobile phones, batteries for electric cars, wind turbines and weaponry.
  
  China has about 30 percent of global rare earth deposits but accounts for 97 percent of production. Beijing has alarmed global manufacturers by reducing exports, prompting pressure from Europe and the United States to treat foreign and domestic buyers equally.
  
  ...
  
  Beijing is merging its rare earths producers to tighten control over production, sales and pricing.
  
  It announced in June that Baotou Steel would become the only miner, refiner and seller of rare earths in the northern region of Inner Mongolia, a production center. It said 35 other companies there would be merged or closed.

  
  
  More here.
  
  Dislike.
  
  So China is basically suspending production, AND they will try to buy out the market at the same time, in an attempt to starve it and force prices up.
  
  Rare Earth metals are needed for electronics and batteries, so they are resources of extreme importance in our modern economies. This is especially true as attempts are made to transition away from fossil fuels for energy and transportation needs. Those hybrid/electric cars that are supposedly the future? Producing those requires a stable supply of rare earths. A supply that China controls and it has long been feared that they would eventually abuse their position for their own benefit, in an unfair way. Looks like that time has come.
  
  Other countries also have supplies of rare earths, but they are not being mined because mining them cheaply like China does is extremely dirty. But if prices skyrocket, then other countries will have to restart production.
• Cucurbita wrote on 2011-10-22 05:01
  Maybe they realize they could have a monopoly on it.
  
  Its not a bad idea for China. They could make a huge profit from not profiting for a while.
• Strawberry wrote on 2011-10-22 05:08
  Forcing other countries to restart production? What a major pain for those countries.
  
  Greed has always gotten them.
• EndlessDreams wrote on 2011-10-22 05:16
  China is smart. It doesn't want to let other countries take advantage of their resources. In a time where almost every country is on some kind of economical depression, China is sure playing the cards right to maintain its economical advantage over all other countries.
  
  It also kind of force other countries to spend more money on researching ways to get around the use of rare earths resources.
  
  Other countries can say what it wants, but it is in no position to back up its words. Usually, it is just the US/Europeans complaining.
• Yoorah wrote on 2011-10-22 05:17

  Quote from Cucurbita;630682:

  Maybe they realize they could have a monopoly on it.
  
  Its not a bad idea for China. They could make a huge profit from not profiting for a while.

  
  &
  

  Quote from EndlessDreams;630716:

  China is smart. It doesn't want to let other countries take advantage of their resources. In a time where almost every country is on some kind of economical depression, China is sure playing the cards right to maintain its economical advantage over all other countries.
  
  It also kind of force other countries to spend more money on researching ways to get around the use of rare earths resources.
  
  Other countries can say what it wants, but it is in no position to back up its words. Usually, it is just the US/European complaining.

  
  
  Of course there is potential for the Chinese company to profit from this. But it hardly seems like an ethical move. Its long-term impacts are also not as clearly beneficial, because their reputation will suffer from this. Seems like a medium-short term profit move, disregarding what happens next.
  
  

  Quote from Strawberry;630703:

  Forcing other countries to restart production? What a major pain for those countries.
  
  Greed has always gotten them.

  
  
  It's a cost vs benefit thing. We have plenty of rare earths in Canada, but mining them in accordance to the environmental standards we have has made it impractical. We did mine them in the past, but cheap ore from China forced those companies to shut down. Now China is being an ass again by cutting exports, forcing us to start mining again. When they see that the rest of the world is once again mining for rare earths, they will flood the market with cheaper ores yet again, no doubt. Dx
• Kazuni wrote on 2011-10-22 05:18

  Quote from Strawberry;630703:

  Forcing other countries to restart production? What a major pain for those countries.
  
  Greed has always gotten them.

  
  
  Compare that to the states and I'd take China any day.
• EndlessDreams wrote on 2011-10-22 05:24

  Quote from Yoorah;630718:

  &
  Of course there is potential for the Chinese company to profit from this. But it hardly seems like an ethical move. Its long-term impacts are also not as clearly beneficial, because their reputation will suffer from this. Seems like a medium-short term profit move, disregarding what happens next.

  
  
  Actually, seems like a pretty ethical and wise move. Their resources, and they can do what they want with it. I don't think they care about reputation. China has always don't really care what the US/European countries say. China would just say that this is an internal affair like many internal affairs whenever the idiot politicians in US/European whines again.
  
  I think this is pretty much a response to the US's recent greedy economical policies against China. The Americans basically got what they deserved. China is continuing to expand bi-lateral trade to many countries in the world, it just that US/Europeans aren't part of their main targets.
  
  
  

  Quote from Yoorah;630718:

  
  It's a cost vs benefit thing. We have plenty of rare earths in Canada, but mining them in accordance to the environmental standards we have has made it impractical. We did mine them in the past, but cheap ore from China forced those companies to shut down. Now China is being an ass again by cutting exports, forcing us to start mining again. When they see that the rest of the world is once again mining for rare earths, they will flood the market with cheaper ores yet again, no doubt. Dx

  
  
  Politics and economics.
  
  It is sort of the same deal with Middle East and US in terms of oil. We can drill our oil as well, but the OPEC countries do have cheaper oil.
• Osayidan wrote on 2011-10-22 14:23
  The prime minister of Quebec has been wanting to start huge mining and other resource gathering in northern Quebec. He's been going to countries all over the place to sell his idea and get investors. Been seeing it now and then in newspapers for almost a year. This is probably going to boost support for this, as there's a lot of local opposition.
• TA wrote on 2011-10-22 14:43

  Quote from Kazuni;630722:

  Compare that to the states and I'd take China any day.

  
  
  China over the US? Boy, what rock have you been hiding under... :scare:
• Justified wrote on 2011-10-22 15:20

  Quote from EndlessDreams;630740:

  Actually, seems like a pretty ethical and wise move. Their resources, and they can do what they want with it. I don't think they care about reputation. China has always don't really care what the US/European countries say. China would just say that this is an internal affair like many internal affairs whenever the idiot politicians in US/European whines again.
  
  I think this is pretty much a response to the US's recent greedy economical policies against China. The Americans basically got what they deserved. China is continuing to expand bi-lateral trade to many countries in the world, it just that US/Europeans aren't part of their main targets.

  
  
  It's not really ethical since they have only their own interests in mind. Greed and selfishness aren't ethical, and whether or not other countries are being ethical/fair is irrelevant as two wrongs don't make a right.
  
  Not saying it's not smart or that they don't have the right to do so, but that doesn't make it an ethical thing to do.
• Zid wrote on 2011-10-22 15:52
  Wasn't hoping to see this happen.
  
  Well, have to track prices on electronics now. @_@
• Kazuni wrote on 2011-10-22 16:14

  Quote from TA;631088:

  China over the US? Boy, what rock have you been hiding under... :scare:

  
  
  Quality of life is better in the US but everyone there is eating off other countries' plates >__>