illegal rare earth smuggling affect the chinese industry
DESCRIPTION
The Chinese government started cracking down on the smuggling of the rare earth elements. In 2013, they lost an estimated 19,000 tons of rare-earth oxides, which were illegally mined and exported. The country’s legal production of rare-earth in 2013 was 80,400 metric tons.TRANSCRIPT
Stanford Magnets
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Illegal Rare-earth Smuggling Affects
The Chinese Industry
The Chinese government started cracking down on the smuggling of
the rare earth elements. In 2013, they lost an estimated 19,000 tons of
rare-earth oxides, which were illegally mined and exported. The
country’s legal production of rare-earth in 2013 was 80,400 metric
tons.
It is estimated that china has about 30 percent of the world’s rare-
earth reserves. They discovered them in the 1980s and have since
seen a growing stable demand for rare earth metals, which are used in
various technological devices. According to the report “Situation of
Rare Earth Industry Economy Operation in 2013” which was
published by China’s Ministry of Industry and Information
Technology (MIIT), China exported rare-earth that were about 12.6
billion USD last year alone. Because of the strict rules of China and
controlling of the market of rare-earth, many illegal activities by the
organized crime targeted mining and exporting of these rare elements.
The wide use in electronics and motors industries caused the market
to be thirst for it.
Smuggling harms the economy by depleting the resources and
deflating the market price. Smuggling caused the Chinese
government in 2013 to cancel 161 licenses of rare earth element and
another 126 companies for smelting and separation were ordered to
cease their activities and wait for correction and rectification. The
government also has decreased the rare earth quotas to reach 15,110
tons in 2014 and identified 26 producers which can participate in
mining and related industries to these quotas. This is not surprising,
considering China lost 1.3 Billion dollars in 2013, because of the
lowered prices mainly because of illegal activities.