In his latest column for Real Clear World, American Resources principal Daniel McGroarty zeroes in on the newly-released Chinese government white paper entitled ‘Situation and Policies of China’s Rare Earths Industry’ and notes the insight it provides into China’s broader mineral strategy.

McGroarty’s key points are as follows:

· The white paper essentially sets the stage for a “pre-emptive defense of Chinese Rare Earths policy.”

· China’s claimed correction of the amount of its Rare Earths reserve – a reduction from 36 percent (as per USGS estimates) to 23 percent of total global reserves will allow Beijing to “argue in the WTO that its sovereign right to manage its own non-renewable resources blunts any demand by other nations that China serve as the world’s Rare Earths super-store.”

· A less-noticed report that China is placing a bounty on those involved in the country’s burgeoning Rare Earths black market indicates that “as the world races to bring more Rare Earths to the market, China is working to ratchet back supply – and ensure the remainder is tightly under Politburo control.”

· Possibly providing a glimpse into the grand scheme of things, the Hong Kong Exchange’s (HKEx) offer of $2 billion for the London Metals Exchange (LME), which has been called the “most expensive bid ever” for LME begs the question of whether it might “involve the chance, unavailable until now, to locate physical metals warehouses on Chinese soil.”

· Meanwhile, the West’s mineral policies seem to hinge to a large extent on the word “maybe” – as in maybe China will comply with WTO rules, and maybe researchers will develop Rare Earths alternatives, for example.

McGroarty’s bottom line:

“[W]hile the ‘West’ has hopes, China has a plan. And whatever it is, it’s not the one translated into English and published last week on the front page of the People’s Daily.”