India is Expanding Rare Earths Production, But China Won’t Go Down Without a Fight

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Sohrab Darabshaw, contributes an Indian perspective on industrial metals markets to MetalMiner. This is part two of a three-part series on International production of rare earth elements.

When China’s Ministry of Commerce announced that it had scrapped quotas restricting exports of rare earth minerals and would replace them with a system of export licenses many thought this would open up new markets to previously tightly regulated Chinese REs.

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The quotas had been in place since 2000. It was thought to be positive news for RE consuming nations such as Japan, the US and Taiwan. But the last word on that may be tied in to the announcement of yet another new RE policy by Beijing, likely to come in mid-2015.

Not So Friendly Neighbors

India and Japan, two nations China has had a strained relationship with when it comes to REs, have teamed up to jointly explore new rare earths production.

As reported by MetalMiner, India is miles behind market leader China in the RE production department, yet is the second-largest producer of the rare minerals contributing 2,800 metric tons per year to domestic and world markets. China, on the other hand, produces 105,000 mt.

According to official figures revealed by the government of India in its parliament earlier this month, the total production of RE in India by state-owned Indian Rare Earths Limited (IREL) between 2009 and 2014 was 310.145 mt, and the total sale in the same period was 285.90 mt.

But IREL has set up a new 10,000 mt per year monazite processing plant (MoPP) at its Orissa Sand Complex (OSCOM) in the province of Odisha. It is expected to produce 11,000 mt per year of mixed rare earths chloride (MRECL), equivalent to 5,000 mt of rare earths oxide (REO) at its full capacity and it is in its final stage of commissioning.

This production capacity is about 3% of the current global production of REO, which is estimated at 130,000 mt per year. Not only that, the government revealed that IREL had developed technology to produce separated rare earths oxides (SREOs) of various purities up to their very high pure form from MRECL and this facility in the southern State of Kerala is also under commissioning and close to opening.

China may find itself suddenly surrounded by nations who are bent on creating an alternative supplier market for REs.

China Not Giving Up Without a Fight

Last week came the news that China’s more than 100-day probe of the Indian Ocean floor, right under the nose of India, revealed a massive trove of minerals, including precious metals such as gold and silver, and maybe even REs. In 2012 China had obtained approval from the International Seabed Authority to explore the seabed region in the Indian Ocean for as many as 15 years, much to India’s consternation.

China did something similar in 2001 by earning exclusive rights to explore a 28,958 square-mile of seabed for polymetallic nodule ore deposits in the Pacific Ocean.

The March 2015 edition of Roskill’s RE report said the global RE industry was expected to undergo “significant changes” by the end of 2015 as new sources of supply come online.

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