American Resources Policy Network
Promoting the development of American mineral resources.
  • The Geo-Politics of Rare Earths: China Reported to Add to Stockpile

    ARPN readers know that one of the core tenets of the Resource Wars thesis is that the market for strategic and critical metals is never immune to government interventions. Witness today’s Bloomberg report: “China Said to Add 10,000 Tons to Rare Earths Stockpiles.”

    Bloomberg reports:

    “China may stockpile more medium-to-heavy rare earths this year such as terbium, lutetium and yttrium, which are used in applications ranging from lasers to nuclear reactors, said China Merchants’ Peng [Bo].

    “China’s own industrial sector, in its rudimentary form, isn’t yet able to make full use of the country’s output, Peng said. The government is likely to hoard these elements for future use, she said.

    “‘The mining and refining industry, hampered by a drastic slump in prices, sees the purchase as a life-saver,’ said Chen Huan, an analyst at Beijing Antaike Information Development Co. ‘Prices the government agreed to pay are much higher than the prevailing market price.’”

    In March, the World Trade Organization ruled in favor of the U.S., Japan and EU’s contention that China’s Rare Earths export quotas were not justified. As a source within one of China’s state-owned enterprises told Bloomberg:

    “‘China is facing imminent pressure to abolish the export quota, so stockpiling is part of the policy reaction to help prop up prices and keep more of the resources at home for future use.’”

    As a follow-on, ARPN will share any U.S. Government reaction to this move – if in fact there is a reaction.

  • China’s growing love affair with Platinum and its implications for U.S. policy

    “It happens to all commodities. At one time or another, China falls in love with you and barring a drought or striking miners somewhere, your price becomes dependent on Chinese mood swings” – that’s the conclusion drawn by Forbes contributor Kenneth Rapoza, who zeroes in on China’s growing love affair with Platinum.

    An extremely rare metal – with a concentration of only 0.005 parts per million in the Earth’s crust – Platinum is not only one a valuable precious metal used for adornments, some of its key properties – ductility, durability, malleability and a very high melting point make it a sought-after component of a broad range of applications. One of its main uses is in the manufacture of catalysts used in diesel automobiles – an area where global emission standards are causing a “structural upward shift in demand for these auto catalysts and the platinum used in them.”

    Interestingly, one of the key areas of interest for the Chinese is not so much Platinum’s versatile application. As Rapoza argues:

    “Less well known, however, is that the largest single source of platinum demand over the past few years has been jewelry – and nearly all of that demand stems from the Chinese.”

    He raises several interesting points in his piece:

    • While catalysts used in vehicles accounted for the largest demand component for Platinum prior to the economic downturn in Europe, and was almost double the demand from Chinese jewelry, this ratio has been almost completely flipped. By 2012, Chinese jewelry demand had risen to nearly 2 million ounces (a 16% increase), and demand for auto catalysts in Europe had dropped to 1.3 million.
    • With Europe emerging from the recession, this demand will pick up again. Meanwhile, Chinese interest in Platinum as an adornment will likely continue to increase, as Platinum is increasingly the metal of choice for wedding bands.
    • An additional interesting development is the fact that “precious metals access in modern communist China has evolved from an almost illegal status to one that is actively encouraged by the state.”

    Meanwhile, as Visual Capitalist points out in part two of their outstanding three-part visualization of Platinum’s history, supply and demand and investment opportunities, the metal’s supply is largely concentrated in medium-to-high risk jurisdictions.

    The United States’ import dependency rate for Platinum presently stands at 91 percent. At the same time, Platinum has made the top tier of the American Resources Risk Pyramid in our 2012 Critical Metals report, underscoring its relevance to U.S. defense-related applications and proneness to supply disruptions.

    With China stepping up its role here again, this should serve as a reminder why the United States cannot afford to ignore this proverbial “800 pound gorilla” and would be well advised to devise a comprehensive critical minerals strategy.

  • Greenland’s mining decisions likely to refuel race for Arctic riches

    In what may become a groundbreaking decision, Greenland’s parliament has voted to lift a long-standing ban on uranium mining, opening the door to Rare Earths exploration and development in the Artic territory. A-semi-autonomous part of Denmark, Greenland is hoping this decision and the expected industrial boom will bring it closer to achieving economic and ultimately [...]
  • Resource-hungry China continues its global quest for minerals

    While the fate of even first steps towards implementing a strategic minerals policy in the U.S. remains questionable, China is expanding its mineral resource footprint virtually all over the globe. According to recent media reports, Chinese companies have made forays into Sri Lanka looking for copper, zinc and aluminium suppliers. While this search was unsuccessful, [...]
  • McGroarty on The Hill’s Congress Blog: “The U.S. Government has it in its power to act now to close our “copper gap.”

    While China has taken steps to position itself in a “resource war that will increasingly define economic growth and national security in the 21st century,” the United States has subjected itself to a dangerous degree of import dependency for critical minerals – that’s the bottom line of American Resources Principal Daniel McGroarty’s new piece for [...]
  • Too little, too late? The West’s response to China’s REE stranglehold

    In an effort to challenge China’s near-total supply monopoly and the geopolitical power play that came with it, countries around the world have taken steps to seek alternative sources of supply. With new production coming online in the U.S. and Australia in recent years, along with small-scale production in India, U.S. Geological Survey figures document [...]
  • 3D Printing & the “New Rare Earths”

    “3D printing companies are the new Rare Earths.” Thus spake Twitter, a few hundred-million Tweets ago, giving birth to the new meme on what matters most in our constantly-evolving technology world. Meaning, of course, that the furor over Rare Earths sparked three years back — when China used its then-97% production monopoly as a weapon [...]
  • Why Tantalum should be on U.S. stakeholders’ radar

    Gearing up for their upcoming conference on conflict minerals in early May, our friends at MetalMiner are stepping up their coverage of Tantalum, one of the four minerals commonly referred to as conflict minerals, with the other ones being Tungsten, Tin and Gold. A recent MetalMiner guest post by Chelsea Craven of Zepol Corporation looks [...]
  • China and Brazil increase resource footprint in Africa

    Last month, the Huffington Post published a column discussing the growing footprint of two emerging powers in Africa – China and Brazil. China is a known quantity on the continent, and has been the “unequivocal leader in infrastructure development within Africa.” More recently, however, Brazil has accelerated its efforts and more than quadrupled investment to [...]
  • Antimony metal to be watched

    In a piece for DailyMarkets.com, analyst Jeb Handwerger zeroes in on Antimony. Antimony is a key component in fire retardants as well as batteries, ceramics, touch-screen technology, glass, and ammunition and has seen largely stable prices in unstable economic times. With China being its top producer controlling nearly 90 percent of global supply and other [...]