When will the chaos in rare earth mining be resolved? At the same time, strengthening market governance, eliminating local protectionism, establishing a specialized agency for domestic rare earth resource management, and standardizing the market industrial chain of rare earth resources can help resolve rare earth issues domestically in advance.
Today's China is not the same as it was 30 years ago. China no longer needs to export rare earth resources to obtain foreign exchange to support domestic construction needs. Because of the unique state-owned nature of rare earth resources, if they cannot be more effectively utilized at present, temporarily closing mines may be a good choice.
The Mountain Pass mine is the world's largest single fluorocarbon cerium ore deposit and is one of the most important rare earth resource sites in the United States. However, in 2001, the U.S. chose to close this mine without triggering a global rare earth resource war.
At the same time, cutting off the supply from the source of rare earth production naturally eliminates the need for the Chinese government to go through great lengths at customs to play WTO rule games with Western countries.
Therefore, improving the domestic utilization rate of rare earth resources and increasing domestic demand for rare earth resources in China would make rare earth producers less willing to continue exporting.
If exports become a self-imposed restriction by Chinese enterprises rather than through government quotas or other means, it would not violate the so-called regulations of the World Trade Organization.
At the same time, China should focus inward on what needs to be done regarding rare earth issues. The World Trade Organization is the ultimate arbitration body for international trade disputes, so how to uphold China's national interests according to principles beneficial to our country will be a very important task in the near future.
Perhaps, in the near future, the United States and other Western countries will bring the rare earth issue to the World Trade Organization. For this, China needs to make active preparations. A European Union trade commissioner, when discussing the WTO ruling on restricting raw material exports, deliberately mentioned the issue of rare earth exports. He stated: "China should ensure the free export and fair supply of rare earth resources." This is good advice, and it would be wise for the Chinese government to heed it.
During the entire litigation process of raw materials, certain individuals in Western countries have consistently talked about China's restrictions on rare earth exports.
It can be easily imagined that this lawsuit involving nine types of raw material exports is actually a rehearsal for Western countries to file a complaint about rare earths to the World Trade Organization.
In 2011, China's Ministry of Commerce announced the first batch of rare earth export quotas for 2011, totaling 14,446 tons, which was a significant reduction of 11.4% compared to the 16,304 tons from the same period last year, causing dissatisfaction among Western countries.
The president of Germany's automotive industry association, Weißmann, once stated that difficulties in obtaining rare earths or price increases would affect the competitiveness of German car companies. A spokesperson for Volkswagen Group once said they were closely monitoring the rare earth market and would consider sourcing from Australia or Vietnam if there was a shortage.
For this reason, the Chinese government has recently increased restrictions on rare earth exports, but this immediately caused strong reactions from the Western world.
At the same time, the development and utilization of rare earths lack proper management, and there are serious problems with over-exploitation by local governments and private enterprises.
Rare earth resources, which hold such significant importance, perform poorly in the Chinese market. Rare earth prices are kept too low, and there are no limits on export volumes. When the U.S., France, and other countries were closing their own rare earth mines, we were exporting them recklessly.
If the future of the automotive industry lies in new energy vehicles, then the abundance of rare earth resources will determine which country prevails in the final stage.
For the automotive industry, rare earths determine the success or failure of the development of the future new energy vehicle industry. The manufacture of electric vehicles cannot proceed without rare earth resources. In early 2011, Hyundai-Kia Motors proposed revising their articles of incorporation, with an important clause being, "Finding stable sources of rare earths to provide resources for the development of eco-friendly vehicles."
Rare earth resources are called industrial flavor enhancers, and they play an extremely crucial role in the development of multiple high-tech fields such as new energy, new materials, environmental protection, aerospace, and electronic information. Xu Guangxian, known as the father of China's rare earths, once said, "Without rare earths, the U.S. could not have won the Gulf War against Iraq."
Rare earths are to China what oil is to the Middle East. Currently, more than 90% of the world's rare earths are produced in China, but the chaos in rare earth exports causes China to suffer huge losses and waste in this critically important strategic resource.
Experts quoted by the New York Times stated that the legal difficulties Beijing faces may set a precedent, allowing Western countries to challenge China's restrictions on the export of other natural resources, including rare earths.
Even so, China must remain vigilant about this WTO ruling because Western countries might use this successful precedent to exert even more pressure on China regarding rare earth material exports.
Although this news disappoints China, fortunately, highly sensitive rare earth materials were not included in this World Trade Organization litigation.
On January 30, China suffered another defeat in a World Trade Organization case. The WTO appeals panel partially upheld the ruling that China's practices regarding the export of nine industrial raw materials violated international trade rules.
According to statistics, in 2011, China's silver production reached 1,244.6 tons, an increase of 7.14% year-on-year. China is the world's largest silver consumer and the third-largest silver producer, yet it still lacks a silver futures market, which is undoubtedly regrettable. Market participants believe that China urgently needs to launch silver futures to provide hedging services such as futures trading for related enterprises and also offer investors new investment tools and risk management tools.
In 2011, globally, the most eye-catching silver futures transactions were small contracts. India's MCX 1 kg and 5 kg silver futures contracts ranked first and second globally in terms of trading volume (contracts). In contrast, large silver futures contracts performed averagely, except for the star product of the New York Mercantile Exchange (COMEX), the 5000-ounce standard silver futures contract, which performed well, while the trading volume of silver futures contracts at other derivatives exchanges was relatively small.
The United States is the earliest country to conduct silver futures trading globally. The trading unit of silver futures contracts in the U.S. is relatively large, with the standard silver futures trading unit being 5000 ounces (approximately 155.52 kilograms), delivered physically. Additionally, there are "mini" silver futures of 1000 ounces (about 31.10 kilograms) and "small" (MINY) silver futures of 2500 ounces (about 77.76 kilograms), both delivered in cash.
According to a report on February 3 by the Futures Daily, global silver futures trading was very active in 2011, with a significant increase in trading volume, especially for small and micro silver futures contracts. Statistics from Haitong Futures on the trading records of 19 silver futures contracts across 13 global derivatives exchanges showed that in 2011, nearly 144 million silver futures contracts were traded globally, an increase of 172.57% year-on-year. In terms of trading volume, 4.15 billion kilograms of silver futures were traded globally in 2011, an increase of 56.47% year-on-year. In 2011, four new silver futures contracts were launched by four derivatives exchanges globally.
In 2011, nearly 144 million silver futures contracts were traded globally, an increase of 172.57% year-on-year. In terms of trading volume, 4.15 billion kilograms of silver futures were traded globally in 2011, an increase of 56.47% year-on-year.