Agree
And remember as tightening of substantial smuggling takes hold supply will start to dry up for many.
http://www.metal.com/newscontent/56649_rare-earth-smuggling-still-rife-in-china
Monday January 13, 2014, 4:30am PST
By Andrew Topf - Exclusive to Rare Earth Investing News
Despite a two-year campaign to stamp out illegal rare earth mining and trading in China, smuggling is still widespread in the country, which has a monopoly on the rare metals, a Chinese official said.
According to Reuters, Su Bo, China’s industry vice minister, told a meeting of rare earth companies last week that illegal behaviour is continuing due to local government protectionism and a failure to implement regulations.
However, a statement on China’s ministry of industry and information technology website says that “local governments have been ordered to crack down harder on illegal activities, and tightened rules for the sector would be released soon,” as per Reuters.
Smuggling has allowed China to skirt export restrictions that previously resulted in cross-the-board price hikes for the 17 rare earth elements used in high-technology applications like smartphones and green energy.
Bo said in May that a black market in rare earths has traded some 40,000 tonnes of the materials in previous years, compared to a total annual export quota of roughly 30,000 tonnes.
Previous crackdowns on mining, processing and smuggling have resulted in higher rare earth prices , and now the Chinese government has taken further steps to control the industry by consolidating the sector (larger companies taking over smaller producers), as Rare Earth Investing News reported.
But in what appears to be a case of “the tail wagging the dog,” current low prices for rare earths may actually be discouraging smuggling. Metal-Pages reported last Thursday that traders in Europe are seeing fewer unsolicited offers for smuggled rare earths from China, but they believe that the lower number of offers is “more the result of rare earths prices falling to levels which do not make smuggling and illegal production so worthwhile, particularly for the lighter elements such as cerium and lanthanum.”
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