World Trade Organization (WTO) ruled recently that China’s rare earth elements (REE) export restrictions violate international trade regulations.
- China has a 90-percent stranglehold on the bulk of supply and a 70-percent share of global consumption.
- China is looking at removing REE export taxes, which were levied at a rate of 15 to 20 percent.
- The new tax regime “will force Chinese rare earth producers to raise prices towards levels outside China.”
- The impact in the short term could be significant, as domestic prices are generally 36 percent lower than FOB prices.
- Should China manage to clean up its smaller mines and consolidate its REE industry, the country could solve the current overcapacity situation.
By Vivien Diniz of Resource Investing News