why the neodymium magnet price rise? 2017-8-24
Neodymium price increase…. just the tip of the iceberg.
Chinese Rare-Earth industry it has been affected by long existing problems such as illegal mining and smuggling. Outlaw producers don't pay taxes and observe none of the environmental and occupational health standards, that’s why their extracting costs are much lower.
Many companies rushed into Rare Earth mining and production business when prices were very high, and start to extract and process much more than what the market really needed, (Rare Earths are not as difficult to mine). Illegal Miners have jumped on this train as well, they are bypassing regulations to dig and smelt the metals. Illicit Chinese output and smuggling have facilitated drag global Rare Earth prices to their lowest value, hitting hard the legal producers inside China.
Some estimates put exports from illegal mining as highs as 40,000 tonnes.
At present time about 90% of China’s Rare Earth producers are operating at a loss as prices for the RE metals, used in high-tech sectors, continued to drop (up to a few months ago), due to overcapacity and illegal mining. According to the Association of China Rare Earth Industry, many small Companies have been losing money for years and many of them are closed or near to close up.
Why prices of Rare Earth raised so sharply in the last months?
China is stepping up efforts to restrict illegal mining and exporting of Rare Earths by setting up a system to certify the origin of supplies of the material also used in Neodymium magnets production.
In addition to the above, the Chinese Government is poised to impose a number of new environmental regulations including green export certificates and new taxes that are based on the value of the minerals, rather than on volume as is the case at present.
Beijing have started to confine Rare Earth producers out of business if they don’t qualify for new environmental regulations including green export certificates and new taxes.
That is China’s endeavour to limit resource despoliation and as well the dangerous artisanal mining and the resulting unrestrained pollution.
The Rare Earth processing is characterized by high levels of water consumption, energy inputs, and chemicals use. The extraction process involves digging several holes of few feet in depth and feeding pipes into the holes. A concentrated mixture of chemicals is then pumped through the pipes, sinking into the clay below and leaching out rare earth metals as it passes.
There are many environmental issues associated with Rare Earth production, the chemicals used in the refining process have been responsible for the disease and occupational poisoning of local residents, water pollution, and the destruction of farmland.
These environmental and occupational health problems commonly result from insufficient environmental regulations and controls in the areas where Rare Earth are mined and processed, especially in case of illegal mines.
China cannot win this battle alone because this is not a Chinese battle only.
End users have got to pay attention to the sources of material and make sure they're not actually buying illegal material.