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International News Title: Rare-Earth Furor in U.S., Japan Overlooks China's Push to Control Prices Oct. 22 (Bloomberg) -- China’s curbs on rare-earth exports may owe more to a 2006 policy to create fewer, larger companies than a knee-jerk response to trade and territorial disputes. A directive that year tagged mining among the pillar industries the government wanted state enterprises to dominate to enhance returns and global competitiveness. This year it started closing down private mining companies to consolidate the industry around a handful of producers led by Inner Mongolia Baotou Steel Rare Earth High-Tech Co. Global repercussions from the overhaul drew attention in July when the government said it would cut export quotas 72 percent in the second half of the year. China accounts for more than 90 percent of worldwide production of the metals, used in components for Toyota Motor Corp. hybrid cars, Lockheed Martin Corp. radars and General Dynamics Corp. tanks. “It’s not a new policy,” said Peng Bo, an analyst at Shenzhen, China-based Guosen Securities Co. “China, as a supplier of 97 percent of rare-earth demand, feels a need to control both production and exports and doesn’t want to sell at dirt-cheap prices.” The export cutbacks and China’s near-monopoly has prompted the U.S. government to seek to revive domestic mining and led German Chancellor Angela Merkel to call for expanded production in eastern Europe and Central Asia as an alternative supply. China said this week it hasn’t suspended shipments to the U.S. and Europe as reported on Oct. 20 by the New York Times. Those sanctions were imposed after a Chinese official summoned foreign journalists to denounce U.S. trade actions, including a probe into Chinese subsidies of clean energy exports, the Times said. Japan Shipments Japan said China halted shipments of rare earths last month after a collision in disputed waters between a Chinese trawler and the Japanese Coast Guard led to the fishing-boat captain’s detention. Chief Cabinet Secretary Yoshito Sengoku said Oct. 20 that the import situation “hadn’t changed” weeks after the captain’s release. Nobel Prize-winning economist Paul Krugman wrote in the New York Times on Oct. 18 that “the incident shows a Chinese government that is dangerously trigger-happy, willing to wage economic warfare on the slightest provocation.” China started to rein in mining of rare earths in May 2009, setting production quotas to help bolster prices. The caps and subsequent export restrictions did just that. Cerium oxide, used for polishing semiconductors, soared sevenfold in the past six months and other elements have more than doubled, according to Metal-Pages Ltd. in London, which tracks prices. The term rare earth applies to a group of 17 chemically similar metal elements that also include lanthanum and neodymium. ‘Management and Control’ China’s Premier Wen Jiabao on Oct. 6 told European business leaders in Brussels it was “necessary to exercise management and control over the rare earth industry, but there won’t be any embargo,” according to the official People’s Daily. “China is not using rare earths as a bargaining chip,” the newspaper cited him as saying. Outside of China, the surge in prices persuaded companies to announce new production plans. A California mine owned by Greenwood, Colorado-based Molycorp Inc. that was shuttered in 2002 plans to reopen within the next two years. Sydney-based Lynas Corp. said it may start extracting rare earth metals in Australia late next year. “Until 2012 when we start producing, the U.S. has to rely on China,” Molycorp Chief Executive Officer Mark Smith said in an Oct. 19 interview in Xiamen, China, where he was attending an industry conference. Mine Closures Inside China, mine closures continue. Inner Mongolia Baotou is now the sole producer in the South Africa-sized region from where it takes its name, Deputy General Manager Li Zhong said at the same industry gathering. There remain more than 100 smaller producers in southern China that are coming under increasing regulatory scrutiny because of the 2006 consolidation edict and reports of environmental damage caused by mines that generate 2,000 tons of waste for every ton of ore. “Small rare-earth producers in the south have suffered from government regulations and policies,” said Wen Yihui, general manager of Hunan Yiyang Hongyuan Rare Earth Co Ltd. , one of the largest private producers in southern China. “We are still a small producer whose survival is very much reliant on government policy changes.” Japanese Precedent Government-led industry consolidation aimed at creating profitable companies in strategic industries is not unique to China. In postwar Japan, the former Ministry of International Trade and Industry pushed an industrial policy aimed at limiting competition in steel, coal mining, shipbuilding and other industries, according to Takako Ishihara, a professor specializing in antitrust policy at Hyogo University. China’s version also includes steel, autos and telecommunications. Liu Aisheng, former director of the Chinese Society of Rare Earth, said in an August interview that excessive mining by small companies caused inefficiencies and low prices that the government needed to address by limiting production. “Chinese exports have declined, because domestic reserves dropped significantly,” said Jiang Fan, deputy director general of the Commerce Ministry’s Department of Foreign Trade, speaking in Xiamen on Oct. 19. “China’s rare earth industry once was very chaotic, and seriously damaged the environment and resources.”
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#1. To: Brian S (#0)
Japan is 'overlooking' nothing. Like a moon being drawn into a planet's orbit.
"IV: War Racket: The Global Banking Intelligence Complex Business Plan The Covert Origins of the Af-Pak War and How It May Lead to World WarOne of the reactions a person may have after learning this information, is to believe that perhaps these wars to control the earth’s remaining oil supply are beneficial to the US population. It may even eventually be a clever propaganda strategy to paint these wars as preserving the American way of life and our standard of living by obtaining these vital resources. Coming to this belief would be tremendously naïve. "
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