More instability predicted as rare earth group cuts supply
The lamp industry is set for more supply-side issues after China’s largest rare earth supplier suspended production for one month in an attempt to drive up prices.
The state-owned Baotou Iron and Steel Group, which controls 60 per cent of Chinese rare earth supplies, signalled the move after prices slid more than 30 per cent from record highs in July, with some elements down 10 per cent since the end of the Chinese holidays on 10 October. Prices are now anticipated to rise rapidly again because a one-month suspension by such a large producer is predicted to remove 5,000 tonnes of rare earths from the global market.
Beijing’s reforms of rare earth supply have thrown the lighting market into turmoil in recent times. GE Lighting recently announced that the price of Lanthane alone – an important component in energy efficient lighting – had increased by up to 2,000 per cent since the beginning of the year, so a restriction in production will do little to assuage fears that costs will continue to fluctuate and margins will continue to be squeezed in the sector.
“I don’t think things will settle down until 2013,” said GE Lighting’s president and CEO (EMEA) Phil Marshall. “That’s when American mines are anticipated to be ready for rare earths metal supply. Until then, things will continue to be difficult.”
Rare earths found…in Afghanistan
The US Geological Survey (USGS) has announced that it has uncovered one of the richest deposits of rare earth metals anywhere in the world. The only problem is its whereabouts –the Taliban-controlled badlands of Afghanistan’s Helmand Province.
So far the USGS team has mapped 1.3 billion tonnes of rocks in the region and estimates that they hold enough rare earths to supply current world demand for ten years. The discovery will spark huge interest from mining companies and could also hold the key to Afghanistan’s future prosperity.