'OPEC' for rare earths could cure price pains
- Source: Global Times
- [00:47 September 09 2009]
- Comments
By Wu Ruidong
Rare earth elements, such as yttrium, are core materials for highly advanced and sophisticated technology in the 21st century, and also a precious resource scrambled for by various countries.
China, the world's largest producer and exporter of rare earths, has been plunged into a "gold-sold-at-the-price-of-potatoes" embarrassment due to dispersed production.
In order to regulate the country's rare earth industry strategically, the "2009-2015 Roadmap for the Rare Earth Industry" is about to be launched.
Rare earths are themselves more expensive than gold, but they were once sold at "the price of pork," and now at "the price of potatoes."
This underlines the dilemma facing China's rare earth exports' industry.
China has two Achilles' heels in its export trade of rare earths, one is blind and disorderly exporting, the other is a lack of pricing power despite its super large share of rare earth export in the international market.
Those who concern themselves with China's iron ore import know the diffculties posed by the three iron ore tycoons in Australia and Brazil for the Chinese steel industry with their international say, resulting in exceptional passivity by the whole Chinese steel industry.
Since China possesses no pricing power in rare earth exports, European and American countries snatch large amount of rare strategic resources unique to China at extremely low prices and hoard them, so that China is actually sacrificing the interest of the future generations for the good of other countries.
Therefore, the roadmap for the rare earth industry is definitely the right decision, considering China's strategic principle, its gradually dwindling non-renewable resources and the public opinion, which has been proved by a survey conducted by the Global Times recently in which nearly 90 percent of respondents expressed their support for the country's regulation of strategic industrial raw materials.
