China has tightened control over the production of uncommon earths, strengthening the surveillance of this sector, and the Xi-Trump gathering in Beijing is shortly to take place. The US is heavy dependent on these elements, which is why Xi strengthens its negotiating position before talking.
Although it is unknown what topics will be raised during the summit, many observers anticipate that the issue of uncommon earth metals (17 minerals needed to produce permanent magnets, wind turbines and electronics) will appear in the talks due to their strategical importance.
According to Bloomberg Economics estimates, around $1.4 trillion of the American economy is linked to industries utilizing these minerals.
Currently ]]>China accounts for more than 2 thirds of global production]]> and almost monopolize the refining process of these minerals. Last year Beijing utilized this dominance, limiting exports of 7 uncommon earth metals in consequence to US duties imposed by president Donald Trump.
Now Xi wants to strengthen his negotiating position before gathering Trump.
China tightened production control ]]>rare earth metals]]>, strengthening supervision of this sector.
The draft paper published by the Ministry of manufacture and Information Technology (MIIT) presents a fresh regulatory strategy that provides for administrative penalties for Chinese uncommon earth metallic producers for certain infringements.
These include, among others, exceeding production limits in terms of extraction and melting, as well as unauthorized activities related to mineral separation. For example, a company that exceeds the limit by little than 10% can be fined even 5 times illegal profits.
In major cases (e.g. production above the 30% limit), business licences can be revoked - which underlines China's desire to gain full control of the uncommon earth metallic sector.
In addition to financial penalties, companies may lose their products and equipment that will be confiscated by the state. They may besides be punished for the sale of illegally extracted or processed materials and for incorrect reporting of production flows.
MIIT reported in a message that it is presently collecting public opinions on the proposed guidelines.
The latest initiative strengthens the strategy of production limits, environmental controls and consolidation in China - a country that is by far the largest maker of uncommon earth metals in the world.
Finally, I would like to remind you that a fresh ETF has late been created for companies in the uncommon earth industry, which in its portfolio ignores Chinese companies.
This is the trend: China is pushing the screw to hang control of uncommon earths, and the West is trying to form its own REEs supply chain, only it cannot be done quickly. Thus, the prices of uncommon earth metals and the listing of western companies from this manufacture are worth having on the radar.
Independent Trader - ]]>Financial independence]]>
Dividend investments. ]]>How to analyse dividend companies?]]>
Author: ]]>Konrad Parsley]]>
