Fresh from increasing its quota for exports of rare earth elements in August, the first time since 2009, China will look to re-start purchases of rare earths to boost its strategic reserves.
Rare earths producers are finding demand is ticking higher, which are used extensively in the manufacture of a diverse range of high-tech products, including mobile phones, iPods and wind turbines.
China’s rare earths industry also looks to be on the up after prices mostly settled down a couple years ago following a steep spike after China moved to sharply cut exports of the 17 chemically similar elements that are used to make high-tech products ranging from iPhones to missile systems.
This week, China’s third-largest rare-earth producer, China Nonferrous Metal Industry said it was raising funds to build a processing plant for rare-earth oxides.
Purchasing program to commence
Six large Chinese rare-earth producers are on the list for the purchasing program believed to be 10,000 tonnes of rare earths, according to Du Shuaibing, an analyst with market trends firm Baichuan Information.
This is good news for Australian listed rare earths companies including Peak Resources (ASX:PEK), Hastings Rare Metals (ASX:HAS), Greenland Mining and Minerals (ASX:GGG) and Alkane Resources (ASX:ALK).
The purchases of rare earths is understood to involve heavy rare earths, which are more valuable but less common than light rare earths.
The six companies are Baotou Steel Rare Earth Hi-Tech Co, China's largest rare earth producer by output; China Minmetal Rare Earth Co Ltd; China Nonferrous Metal Industry's Foreign Engineering and Construction Co Ltd; Chinalco Rare Earth Jiangsu Co Ltd; Rising Nonferrous Metals Co Ltd and Ganzhou Rare Earth Mineral Industry Co Ltd.
The expected move is aimed at balancing market supplies of rare earths amid a decline in prices and demand this year.
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