New Chinese rare earth quotas for 2012 and consequences

An article in the Wall Street Journal (Dec 28, 2011) describes China’s announcement of separate rare earth metals export quotas for 2012 – light rare earths (used in magnets) will have quotas separate from heavy rare earths (used in high tech and defense).  In addition, mining companies that did not meet environmental standards will be excluded from these quotas.  But prices for several rare earths have dropped this year (60 % drop for lanthanum oxide and 58 % for cerium oxide), and auto companies like Toyota and Renault have announced plans to stop use of rare earth elements in their cars.  What impact do you expect the new China export restrictions to have on the global supply chain for products using rare earth metals ? Is the reduction in export opportunities for noncomplying mines in China a benefit for companies that use rare earth inputs ? Given the large number of new mines in the rest of the world, should on expect rare earth metals prices to continue to decrease and thus enable increased sue of alternative energy sources ?

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About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues, Sustainability and tagged , , , , , , , , . Bookmark the permalink.

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