China

As Reuters reports, indications are that Americans could soon be buying Zambian or Saudi Arabian copper from Canada and China. Canada’s Barrick, the world’s largest gold mining company, is attempting to win a geopolitical bidding war with its Chinese competitor Minmetal in the effort to gain control over two valuable copper mines in Zambia and Saudi Arabia owned by Equinox.

The takeover offer comes at a time when the commodity’s prices have hit an all-time high. With the global race for scarce resources heating up, the reality is that in a world where commodities are trading at ever-new highs, today’s prices may well be cheap in tomorrow’s world.

Placing emphasis on the stated Chinese government’s goal to preserve an important resource from “unqualified” rare earth miners, while at the same time protecting the environment, a China Radio International (CRI) segment earlier this week reports on the recent tax increase on Rare Earths resources.

The hike announced jointly by the Ministry of Finance and the State Administration of Taxation, increases the tax imposed on mined light Rare Earths to 60 yuan, (roughly $9 USD) per ton, and that on medium and heavy Rare Earths to 30 yuan, ($4.50 USD) per ton.

While the move may give Beijing an opportunity to tout its environmental credentials, it must also be seen in the context of recent media reports that China is building up its own strategic rare earths reserves, for which some of the revenue from the tax may be used.

With China already having tightened the screws on Rare Earths exports, the United States and the rest of the world would be well advised to read the writing on the wall that when it comes to ensuring access to Rare Earths, which are critical to a number of U.S. military operations, the future is now.

Molycorp, the leading edge of the U.S. re-entry into Rare Earths production, has acquired a controlling share in Estonia-based Silmet, one of only two rare earths refineries in Europe. The deal will allow Molycorp to double its planned production capacities to roughly 6,000 tons per year.