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Backlash over China's curb on rare-earth metal exports
By Ambrose Evans-Pritchard
The Telegraph, London
Sunday, August 30, 2010
http://www.telegraph.co.uk/finance/newsbysector/industry/mining/7970872/...
China's draconian export curbs on rare earth minerals needed by the rest of the world for frontier technologies is escalating into a serious diplomatic and trade clash with the United States and other leading powers.
Japan's foreign minister Katsuya Okada issued what amounted to a formal protest at top-level meeting with Chinese officials in Beijing over the weekend, saying the sudden cut-off was "affecting the global production chain."
It is the latest sign of rising pressure after angry complaints by companies outside China that rely on this family of 17 metals for hybrid cars, mobile phones, superconductors, navigation, and a host of high-tech industries.
... Dispatch continues below ...
Sona Resources Expects Positive Cash Flow from Blackdome,
Plans Aggressive Exploration of Elizabeth Gold Property
On May 18, 2010, Sona Resources Corp. (TSXV: SYS, Frankfurt: QS7) announced the release of a preliminary economic assessment for gold production at its flagship Blackdome and Elizabeth properties in British Columbia.
Sona Executive Chairman Nick Ferris says: "We view this as a baseline scenario for gold production. The project is highly sensitive to the price of gold. A conservative valuation of gold at $1,093 per ounce would result in a pre-tax cash flow of $54 million. The assessment indicates that underground mining at the two sites would recover 183,600 ounces of gold and 62,500 ounces of silver. Permitting and infrastructure are already in place for processing ore at the Blackdome mill, with a 200-tonne per day throughput over an eight-year mine life. Our near-term goal is to continue aggressive exploration at Elizabeth and develop a million-plus-ounce gold resource, commencing production in 2013."
For complete information on Sona Resources Corp. please visit: www.SonaResources.com
China's commerce minister Chen Deming said that Beijing would not back down over the export quotas. "Mass extraction of rare earth will cause great damage to the environment, that's why China has tightened controls," he said, repeating the official line.
Beijing set off shockwaves in early July when it announced a 72 percent reduction in rare earth exports over the second half of this year. The country has acquired a near monopoly, with 97 percent of global output after under-cutting the rest of the world with Mongolian ores in the 1990s. The sudden cut-off since July has drastically restricted supplies to the rest of world.
The last US mine shut 14 years ago, discouraged by tough US environmental rules. The US General Accounting Office said China now has a "dominant position" with market power. "Rebuilding a US rare earth supply chain may take up to 15 years," it said.
Washington is examining claims that China's curbs breach World Trade Organisation rules by giving preferential access to Chinese companies. The US Trade Representative is collecting data from US firms to assess the basis for a legal challenge. There are strong suspicions that Beijing's aim is to force foreign companies to locate technology plants in China.
Baotou Steel High Tech Co. said in February that it was building storage space for 200,000 tonnes of rare earth oxides. The company has since been told to stockpile metals by party bosses in Inner Mongolia. China Daily reports that Baotou and Jiangxi Copper are aligning their policies and now "virtually control" the market.
China claims it will need a growing proportion of these metals for its own industries, but US and Japanese officials say privately that Beijing's methods are not in keeping with the WTO ethos. Japan has already drafted a "Strategy For Enhancing Stable Supplies of Rare Metals" and has been stockpiling.
Rare earth metals are sprinkled in iPads, BlackBerrys, plasma TVs, lasers, wind turbines, hybrid engines, and smart bombs. They cannot easily be replaced, if at all. Neodymium enhances magnets at high heat, and cerium is used in catalytic converters.
Rare earth ores are not in fact rare, merely scattered and costly to extract. There are ample reserves in the US,
Australia, Canada, Russia, and Greenland. A number of explorers are reopening mines but will not produce significant amounts until mid-decade.
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Prophecy to Become Coal Producer This Year
with 1.5 Billion Tonnes of Resource
Prophecy Resource Corp. (TSX.V: PCY) announced on May 11 that it has entered into a mine services agreement with Leighton Asia Ltd. to begin coal production this year. Production will begin with a 250,000-tonne starter pit as planned in August, with production advancing to 2 million tonnes per year in 2011. Prophecy is fully funded to production and its management team includes John Morganti, Arnold Armstrong, and Rob McEwen.
For Prophecy's complete press release about its production plans, please visit:
http://www.prophecyresource.com/news_2010_may11.php
