Seriously Internal Friction Causes Blind Exports

Seriously Internal Friction Causes Blind Exports --------China's Mineral Reserves Strategic on the agenda
www.cnitdc.com 2007-4-24 China Mining News
The outflows of indium, tungsten, molybdenum, tin, antimony, germanium and rare earth metals caused concern from the top leaders of the State Council and relevant ministry. It was said that since April 2006, the Ministry of Commerce, the National Development and Reform Commission, the Ministry of Foreign Affairs, Ministry of Land and Natural Resources, the Ministry of Finance, the Ministry of Public Security and other relevant ministry have started investigations. Barring unforeseen circumstances, the Ministry of Commerce will soon issue certain strategic mineral resources export quota management policy.
Six years ago, the serious mining accidents of Nandan County in Guangxi caused the close of local mines. It is lucky for some rare metal named indium because the exploitation of this strategic rare metals will come to the end if on the export and exploitation speed of the other kinds of the rare metals.

Indium is widely used in LCD. China's indium reserves hold about two-thirds of the world. On the one hand, China has become the world's most important indium supplier; on the other hand China is gradually losing its leading position on these strategic mineral resources. It is the same in the field of rare earth, tungsten, molybdenum, tin, and other strategic mineral resources.
During the two sessions just concluded, the Central Committee of China Association for Promoting Democracy also submitted proposal to suggest the central government to establish strategic mineral resource reserve as soon as possible.
b>Defending Indium Mineral
The growth of annual global indium ore is 30%. Indium becomes the new strategic resource intensely contested between the countries of the world.Two-thirds of the indium and mineral resources of China is concentrated in Guangxi. The highest Indium ore price once reached more than 10 million RMB per ton, which makes many small refineries built. Indium mining volume shot up, but prices continued to fall. At present, the price is 3.8 million RMB per ton. Tan Yongren, general manager of Guangxi Nadan Jilang Idium Industry said this price was already close to the cost price and many indium producers stop producing.
80% of Chinese indium ore mainly exported to Japan and South Korea. Indium consumption of Japan accounts for 70% of the world. Enterprises of China having been launched and the output increase but the Japanese buyer has announced the cancellation of large single-ordering and no longer imported from China. They secretly through retail dealers and small traders sell at low price caused indium prices plummeted. Insiders pointed out that the absence of a uniform sales and business organizations lead to very serious internal friction."
Yan Jingli, the member of Central Liaison Committee and the president of the Joint Science and Technology Co Ltd expressed that Japan is China's largest indium ore buyers, but only part of indium that Japan imports from China are used for mine production and the other part for strategic reserve. In fact, the United States, Russia and South Korea have corresponding state reserves and these resources are mainly imported from China.
China do not have the leading position in dominate indium prices. Sun Lihui, the deputy director of the Metal and Mineral Commodity Department of China National Minerals and Chemicals Import and Export Chamber, said that the price of indium is controlled by several large purchasers from Japan, South Korea and the United States. The question now is, on the one hand, foreign buyers and a decentralized procurement batches of containing China rare metal prices; Besides, Chinese factories countless small indium, a small indium plant in a local production of two -three months. The surrounding vegetation will be contaminated and die.
Yan said, four largest indium mining enterprises in Nandan have decided not to sell the ore to Japan indium enterprises because the prices offered were too low. Now, some enterprises do not have running capital but just put indium ore collateral to the bank.
A full range of emergencies In China, many rare metals account for 20% of the world reserves and supply 80% of the global consumption. At that rate, 20 years later, a number of rare metals with strategic significance and related to the national security will disappear. According to customs statistics, in 2005 China's export more than 100 kinds of rare metals and products with the total value of 4.07 billion U.S. dollars. The statistic from China National Mineral and Chemicals Import and Export Chamber of Commerce show that including indium, the growth of China's rare metals export nearly reachs 20%. Analysts said that judging from the current rate of exploitation, after 30 years, the world's largest rare earth mine in Baotou Baiyunebo deposits will disappear; another 20 years later, Jiangxi rare earth resources mine will disappear.
In August 2006, Yan Shuangli submitted a report to the Central Committee of the China Association for promoting democracy to suggest the establishment of a national strategic commodities reserves for providing national security material foundation. This year, duting the two sessions period, the China Association for Promoting Democracy Central adopts this report as a blueprint submitted to the CPPCC National Committee to form a special proposal which suggest to use foreign exchange reserves and convert part of foreign exchange reserves into strategic commodities reserves. Jing considered that China should control the export of mineral resources. "There is no need to rely on the export of these resources to earn foreign exchange.”He said," Tungsten is an important raw material for national defense industry, if China do not have tungsten, some countries want to limit China's defense industry development, especially Tungsten line is OK. " Urgent Affairs Cheng Xiaoke, department manager of Guangxi Tong Han indium zinc company wants the state to come forward to purchase indium ore. "Even if the price is lower, we would rather sell Indium ore to the state. "said he. He hoped that state should emphasis on the indium industrial. After all, reserves continue to decrease and it is afraid we should buy from other countries after digging up. The Minmetals Association Sun Lihui worked for has incooperated the large indium producing enterprises togetherto and prepared for the establishment of indium coordination group but he said : "We have held two meetings but small businesses simply do not care about, they have not registered with the department of Trade and Industry, so they have to pay taxes, adopt environmental protection measures. Now we are not clear how many such small enterprises. In the specific proposals submited to CPPCC National Committee, the Central Committee of China Association for Promoting Democracy suggested that the key strategic materials and mineral resources should be implemented for central management, commissioned development, product acquisition centralized and unified sales. Under the condition of Guaranteeing the national interests, control export and national use these key strategic materials and mineral resources. the establish state monopoly system on indium, tungsten, germanium, neodymium, praseodymium, Eu and other special varieties of mineral. In fact, in 2006 the export of indium has been incorporated into the export quota management. But so far, the state indium ore reserves still under discussion stage. Yan-said ,if national attention, it was so much easier because indium is concentrated in Nandan, leading enterprises only four, the state can completely control them. At present, the United States, Japan and other developed countries have established the strategic resource reserve systems. Japan back in the 1980s on the development of the reserves of rare metals law which stipulated that State owned and some enterprises must reserve a certain amount of vanadium, manganese, cobalt, nickel, molybdenum, tungsten, chromium, and other rare metals and adequate reserve enough for the consumption of three months to six months. A few years ago, Western developed countries had large amount of rare earth imports from China for hoarding. Part of the rare-earth owners such as the United States, Australia and Canada limit or stop the development of its rare earth mine and turn to imports from China for a strategic reserve. Japan announced that they would list indium, platinum and rare earth resources to the reserve target, expanded the varieties of rare metal reserves scope. FU Ying, the vice president of the Land and Resources Ministry, said that the phenomenon is worth our careful considering. "State strategic mineral resources management, macro-control and the strategic reserves, should adapt to the general trend of market mechanism national allocation of mineral resources, not reverse trip. Yan Shuangli said it was not late to control now but it was a pity that many countries imported tungsten and stored as a strategic reserve which caused the massive tungsten loss of China.



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