China’s bid to gain control of the world’s richest rare earth metals deposit in 2009 was blocked by Australia’s Foreign Investment Review Board, because of concerns it would threaten supply to non-Chinese buyers, Bloomberg has reported.
Rare earths constitute 17 chemically similar elements, which are used in the manufacture of high-tech devices such as smartphones, electric and hybrid car batteries, laser-guided weapons, and even in the manufacture of wind turbines.
The Bloomberg Rare Earth Mineral Resources Index of 14 companies that have rare earth deposits has more than doubled in the past year.
China controls more than 95% of the world’s current supply of rare earths. In 2010 China said it would cut some exports of rare earths, causing more than a little concern for major buyers such as the U.S and Japan.
Despite the name, rare earth metals aren’t actually rare, and China doesn’t have as much of a monopoly on deposits as it might seem. It’s just that mining of rare earths declined in the U.S., partly because of environmental concerns, and that China could mine the elements at a lower cost. It seems it has become more than viable to re-open mines and search for new deposits. Molycorp Inc in the U.S. is planning to ramp-up production again. It’s share price has also increased markedly.
Bloomberg reports that state-owned China Non-Ferrous Metal Mining (Group) Co. offered $252 million for a 51.6% stake in Australia’s Lynas Corp. The company’s share price more than tripled.
Minutes from a Review Board meeting obtained by Bloomberg through an Australian Freedom of Information Act request, show concern that the deal would be “inconsistent with the government’s policy of maintaining Australia’s position as a reliable supplier to all our trading partners and hence potentially contrary to national interest.”. The review board asked the Chinese company to limit its stake to less than 50 percent.
After the blocking of the deal, Lynas raised $450 million in a share sale to fund its West Australian mine. The company has said it has the richest grades of ore for rare earth metals in the world.
Image By Peggy Greb, US department of agriculture.Materialscientist at en.wikipedia [Public domain], from Wikimedia Commons