AMMG - New caps on rare earth production for 2011 announced by China

April 7, 2011 - PRLog -- New caps on rare earth production for 2011 announced by China last week support the assertion by Abacus Mineral and Mining Group and other experts that the world’s top producers of rare earth elements are not keeping pace with global demand for the critical materials. AMMG is working to fill the gap by developing new sources of rare earths inside Canada and China.

China’s Ministry of Land and Resources said last week that the Asian superpower will cap the total output of rare earth oxide at 93,800 tons this year. The total represents a meager five-percent increase over last year’s cap despite soaring prices and demand for rare elements across the globe. The ministry also announced that it will not grant any new licenses for rare earths prospecting and mining before June 30, 2011.

The announcement is only the latest move by China to keep more of its own rare earths. The nation’s Communist government has announced a series of new policies for its rare earth industry this year. In recent months, China announced stricter emission limits on miners, cuts in export quota and a new resources tax. Despite holding only 30 percent of the world’s rare earth reserves, China nevertheless produces better than 95 percent of the world’s supply. Its new policies signal a change in economic strategy: By slashing exports and raising taxes, some analysts say China may be hoping to entice green technology developers to move their factories to China instead of importing Chinese rare earth ore to factories elsewhere.

Rare earths are critical components in the manufacture of high-tech green energy technology such as photovoltaic solar panels, wind turbine generators and electric car batteries. They are also essential to the production of advanced smart weapons and defense systems. China’s new rare earth policies have led many U.S. officials to support the efforts of companies like AMMG and others to develop new sources of the rare elements outside of China. Last week, President Obama stressed the importance of green energy development to a strong national energy policy during at address at Georgetown University. A day later, Reps. Hank Johnson (D-Ga.) and Edward J. Markey (D-Mass.) introduced a bill that would direct the U.S. Geological Survey to conduct a three-year international assessment of the availability and production of rare earth elements. The Resource Assessment of Rare Earths (RARE) Act would analyze known mineral reserves as well as investigate potential undiscovered deposits outside China.

AMMG is working to take the lead in the effort to develop new sources of rare earth. The company recently acquired a mining property in Canada, in hopes of developing the site into a North American source of rare earth elements. AMMG’s CEO personally inspected the Canadian mine last week; the company is now preparing to push forward with the refurbishment of the mine.

A spokesperson for AMMG said although these restrictions may affect the amount of product we might be able to export, what people have to remember is that the demand within China for rare earth elements outstrips the supply, so even without exporting we cannot keep up with the demand here in China.

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(AMMG) is one of the leading and well-respected rare earth and refractory products manufacturers in the Peoples' Republic of China ("PRC")