China’s Technology Metals mining boom will provide a huge boost to the prospects for some of the $ 12 billion worth of projects currently being developed outside of China, the world’s biggest supplier. China controls ninety percent of the global market and, as part of its pollution clean-up, it’s investigating the introduction of new regulations and taxes in the June half for Technology Metals. These new regulations and taxes are anticipated to drive prices even higher. These measures should add to the loosening of China’s stranglehold on Technology Metals production, seventeen chemically-similar elements which are used in products from Toyota Motor Corp. hybrid-electric cars to Apple Inc.’s iPods, and Tomahawk cruise missiles developed by Raytheon Co.
Chen Huan, a Technology Metals analyst for Beijing Antaike Information Development Co., said that higher prices could spur the development of overseas Technology Metals’ mining projects. Beijing Antaike Information Development Co. is a research unit of state-backed China Nonferrous Metals Industry Association, and it believes prices will rise above twenty percent due to the new rules. These anticipated changes arise because the World Trade Organization ruled in March that China had already violated world trade regulations by imposing export restrictions like duties and quotas on Technology Metals. China consumes approximately seventy percent of global supplies of Technology Metals: these stocks were depleted after China cut exports from 2010.
Illegal Production of Technology Metals
Kevin Schultz is the Deputy Chairman of Northern Minerals Ltd., the developers of the Australian Browns Range project. He commented that they’re stopping illegal production, there are environmental concerns, and there are countries who don’t want to be indebted to China but who require Technology Metals. He noted: “There’s an opportunity.” According to an article on May 21st in the country’s official English newspaper, China Daily, the new measures include a value tax on producers. The report went on – ‘environmental compliance certificates may be required for exports.’ Deputy General Secretary of the Association of China Technology Metals Industry, Chen Zhanheng, advised that he was not aware of any new taxes. The top panning agency, China’s National Development and Reform Commission, has still not replied to questions faxed by Bloomberg. ‘Stockpiles are becoming depleted and customers are now returning to the market, which means prices will increase’, were the comments from Luisa Morena, a Toronto-based analyst at broker Euro Pacific Canada Inc. Shanghai Steelhomes Information prices noted that Neodymium oxide, which is used to create magnets contained in products from headphones to wind turbines, rose 26% in the year to 29th May.
Shutting Down Unregulated Mines
Based on euro Pacific figures, and according to Bloomberg calculations, at least eighteen companies are hoping to commence production by the end of the decade, outside China: combined development costs estimated to be about $ 12 billion. A major intention of China’s campaign, which began four years ago to restrict the production of Technology Metals, was to shut down unregulated mines. It creates waste gas (and this includes deadly fluorine) and wastewater containing cancer-causing heavy metals, like cadmium. The problems of this industry are just a part of a larger green movement in China: in April, China passed the greatest changes to its environmental protection laws in the past twenty-five years.
It’s true that the first players outside China have struggled: U.S. based Molycorp Inc. has a mine in the Mojave Desert, and Lynas Corp., which has invested approximately A$ 1 billion on a Technology Metals plant in Malaysia, are both plagued by delays in achieving successful targets. Prospects for planned projects would also be harmed by a rise in Chinese exports.
Acid Leaching In Southern China
Dudley Kingsnorth, who is the executive director of Industrial Minerals Company of Australia Pty Ltd., said that efforts to stop production using crude acid leaching in southern China mean that China will probably give up its dominance in the supply of heavy Technology Metals. Acid leaching damages agricultural land.
Yttrium and Dysprosium
Securing supplies of the minerals Yttrium and dysprosium was flagged as a priority in an October report to Congress by the U.S. Department of Defense. Yttrium is used in laser targeting and weapons, and Dysprosium is used in magnets for Predator drones and Tomahawk cruise missiles. Some of the companies advancing projects with high concentrations of Technology Metals outside China are Namibia Technology Metals Inc., UCore Metals Inc., and Hastings Metals Ltd.
China’s strategy aims to reduce environmental damage and to supply for domestic electronic industries. Chinese producers are adopting new standards, their costs are rising and are now equal to those paid out by Lynas, noted the Sydney-based company in a May 16 filing. John Mair, executive director of Greenland Minerals and Energy Ltd., said that the Chinese can’t afford to see prices drop because they’re going to experience the biggest increases in the cost structure. Greenland Minerals and Energy Ltd. are seeking to produce uranium, zinc, and Technology Metals in Greenland. Mair believes we’re going to see a global diversification of mines.
By Electio Invest
Electio Invest a premier alternative asset manager dealing primarily in Technology Metals and other industrial commodities. Electio Invest is the first company worldwide to introduce a regulated structure of investing into these alternative commodities for private investors. Clients are able to invest in and trade the elements through a secure online platform.
