• Report
  • Oct 20th 2011 at 11:50AM
  • 8
China's number one rare earth firm announced on Tuesday that it would suspend all operations immediately, according to Nikkei. The Inner Mongolia Baotou Steel Rare-Earth Hi-Tech shutdown is reportedly a direct action aimed at countering falling rare earth prices

Inner Mongolia Baotou, which accounts for nearly half of the world's rare earth output, posted in a filing with the Shanghai Stock Exchange that the halt was aimed at "balancing supply and demand." Prices of some rare earths have dipped dramatically in recent months and China has been known to limit rare earth production to drive up prices, so we'd assume this stoppage is not related to the simple laws of supply versus demand.

Nikkei reports that Baotou's shutdown is to test its market clout. A month-long halt will remove 5,000 metric tons of rare earths from the market and, as rare earth analyst Sam Berridge states, "We would expect a month-long shutdown from the largest producer in the world to impact prices reasonably quickly." All the more reason to start mining for rare earths locked beneath the Pacific Ocean if we're going to keep building advanced vehicles that need the materials.


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    • 1 Second Ago
  • 8 Comments
      Sasparilla Fizz
      • 3 Years Ago
      We need the theme from the Godfather playing for this page. Just like the mob - in external (to China) markets prices have gone up by more than an order of magnitude (10x) over the last 2 years. Prices are much lower if you produce in China where the pricing pressure is hitting this vendor.
      Smooth Motor
      • 3 Years Ago
      We are trading our dependence on one foreign natural resource (oil) for another (rare earth metals). So much for progress........
        JakeY
        • 3 Years Ago
        @Smooth Motor
        Ugh, not this kind of statement again. No, we are not. We can and have make batteries (li-ion vs the nimh in hybrids) and motors (AC induction vs PM motors) without any rare earth metals. The Tesla Roadster and upcoming Model S are a good example. Most rare earths today is used in the electronics industry. The market for rare earths went to China because they were able to produce it much cheaper than other countries (including the US). If the prices get high enough, we can once again start mining our own deposits. Another difference is rare earths (and lithium) are used as recyclable resources on a per car basis. Oil, on the other hand, is not recyclable and is used in the operation of the car. There is a huge difference in consumption and sustainability based on that. The world supply of rare earths (and lithium) only need to be enough to the carrying capacity of cars going in the future since you can recycle it. While oil is guaranteed to run out eventually, since you consume it. That analogy hardly fits.
          • 3 Years Ago
          @JakeY
          It is similar to oil, in that OPEC limits supply to control prices, China limits supply to control prices. Much oil is recycled, a majority of it is burned and sent into the atmosphere.
          DaveMart
          • 3 Years Ago
          @JakeY
          Rare earths are largely not rare at all, and are available in many places. The Chinese cornered the market by producing them cheaply as a by product of other mining activity, and even cheaper due to lax environmental controls. This bankrupted the competition, it will take some time to develop alternatives and the cost is likely to be higher. We can work around it, but it will take time and may present difficulties.
        Woody Becker
        • 3 Years Ago
        @Smooth Motor
        Awesome post Car guy....but sometimes EV-Nazis don't want to hear the truth!
      Edward Odenkirchen
      • 3 Years Ago
      Time for the rest of the world to exploit other sources and tehcnologies not reliant on these materials. Chinese ahve every right to test their market clout...be careful what you ask for China
      amtoro
      • 3 Years Ago
      Here it goes again... China using unethical tactics as always.... all they care about is the profit. Remember when we all heard about diluting milk in water and add toxic elements that show as protein just to make more money? Nice way to become a global player...