China is preparing for a legal battle with the U.S. and the EU before

New approaches to resolve the old dispute over rare earth

17.04.2012 – China is preparing for a lawsuit, which the United States, have been brought by the EU and Japan because of China's export controls on Seltenerdmineralien. The triumvirate of industrial powers brought the case on 13. March before the World Trade Organization (WTO). The Chinese Ministry of Industry and Information Technology was announced, the country was ready, to refer the allegations against position. May Xinyu, research associate of the Academy of International Trade- and economic cooperation, said on 16. March China's financial newspaper Securities Times his view of things with. Following are edited excerpts:
Before the early 1970s, China exported no rare earths, und der Weltmarkt für Rare earth wurde von den Vereinigten Staaten, Europe and Japan dominate. In the 1970s, China gradually faded into the world market for rare earths, and its market share increased over the next few decades to. With its current share of about 90 Percent of the global mining of rare earths from China exercises de facto monopoly. The use of this important raw material needs to be improved urgently, and not only through the production of individual Seltenerdprodukte, but also through the optimization of each step of their processing.

China has every reason, to impose strict controls on its exports of rare earths, even if it means an increase in the prices of these precious resources, because of the existing pricing mechanism has serious flaws. As up to date, the impact of mining on the environment in the price not included, not to mention the scarcity of raw materials throughout.

The problem is, that WTO rules, of the United States and Europe, drawn with a heavy hand, are unfair. The Western states are to, these rules tricky construed in their interest, However accusing developing countries and regions, violate WTO rules, if they try, to protect their legitimate rights. China are not alien to these tricks. Therefore, China should keep during the coming confrontation over rare earth following two points in mind: China should do everything, to win the argument, and at the same time efforts in production and sale of rare earths in the- and strengthen international, so that the Western states and then can not win, if China were to lose the process.

Integrated mining

The coordination of the reduction of deposits of rare earths, which began a year ago, should constitute our highest priority. This is the foundation of a trade association for rare earths. This will allow China, exert greater control over the market for rare earths, mainly because Chinese companies to obtain rare earth mining low profits. The restructuring of the sector is to consolidate the industry. It is primarily about, the many - close to small businesses and to provide the large state enterprises has a higher proportion - especially in southern China make. This also benefits the environment.
However, this will lead to a loss of income at the level of local governments. Into areas, where the decomposition of rare earth elements is set, to ensure sustainable development, large companies should provide financial resources in a reasonable amount, to help the communities in the rehabilitation of the environment and the promotion of new industries.

The existing tax system are the fees for investors from outside, concluding with local governments on a regional scale in the business, still too low. In addition, large corporations and conglomerates maximize often through in-house cost allocations and other measures profits. Thus, they reduce their tax payments and other charges, to which local governments rely. Under such circumstances, conflicts between large companies and local governments inevitably. But if the proceeds go to the Central Government, can get these through transfer payments spread evenly over the land or return directly to the Local Government, be exploited in the management of natural resources area.

The consolidation of the industry through restructuring should not wavered; the leading position of the central government in tax collection and allocation of public funds should not be changed; and market-oriented activities of large companies should not be disturbed. Under these conditions, we should ensure, through adjustments in taxation for, that local governments are able, benefit more from using their land by industrial-scale mining operations. A win-win situation for both large companies and for the communities can only be achieved by taking appropriate measures.

Cleaning technologies

In addition to restructuring the industry, we should turn our attention to the question, as other countries reduce these raw materials. China's rare earth resources account for only forty percent of global reserves. If foreign resources are not degraded, is China's rare earth industry sometime in the future suffer a burglary, incapable, maintain a sustainable development.

If we do not consider the Seltenerdminerale from abroad, Our goal is, to raise prices for rare earths and improve returns for our rare earth industry, even the rare-earth industries in other countries use. Now that China has intensified in recent years in control of their rare earth exports, Other countries have 200 Projects to develop their own reserves of rare earth brought to life. Particularly in the United States is in the Mountain Pass, California - the largest Seltenerdmine the country - the resumption of production with an annual capacity of 10 000 Tons expected.

Of course, many countries are selling their rare earth reluctant, primarily, because these commodities have become a coveted commodity. In order to gain a competitive advantage over global competitors and to maintain its control over the market for rare earths, China must release its first- and cleaning techniques as well as its processing technologies to develop.

The splitting of rare earth elements in their chemical components is very difficult because of their similarity. The process requires both time and expertise. The most difficult is the separation of praseodymium and neodymium. Some foreign companies had a monopoly in these technologies, China was reduced to the role of exporter of rare earth-containing ore and slag.

China has been trying for its first trials in 1972 for the separation of praseodymium and neodymium, to get this problem under control. Led by Xu Guangxian, a member of the Chinese Academy of Sciences, Chinese scientists successfully developed the most advanced extraction technology in the world cascade, and ended the monopoly of the western countries in this area.

With this advanced technology, China has almost reached the level of Western mining companies for rare earths. The high-purity rare earths from China have captured the global market. As a result, prices were lowered in the international market by thirty to forty percent. Under this “China Influence” some Western countries, which had monopolized the world market for rare earths long, production restricted or stopped, and some have sought the cooperation with Chinese enterprises.
If China seeks cooperation with other countries, it should hold on to exclusive ownership of rare-earth company, for control of the separation and purification of rare earths to maintain and strengthen and protect China's core technologies in this area effectively.
(Beijing Review)

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