On May 20, the A-share rare earth plate experienced a rising tide, which became the biggest highlight of the A-share market on May 20.
Looking at this news alone doesn't seem to explain anything, but if it is related to a series of events such as the continuous rectification of China's rare earth industry in recent years, the steady rise of rare earth prices, the opening of rare earth resource reserves and the development of overseas resources by Chinese rare earth enterprises through mergers and acquisitions——
That can explain a problem: China will take the initiative in the "rare earth war"!
Some people may think that rare earth is at best a resource. Is it so important?
Of course it's important!
As early as 1992, Deng Xiaoping mentioned during his southern Tour: "there is oil in the Middle East and rare earth in China. China's rare earth resources account for 80% of the world's known reserves. Compared with the oil in the Middle East, it has extremely important strategic significance. We must do a good job in rare earth affairs."
Moreover, western countries have always liked to set many obstacles to China's export trade, but they have always hoped that China's rare earth export "more is better".
Recently, when the United States waved round after round of tariff sticks to China, China's rare earth has not been listed in its long list of tariff products.
Countries have also played games with each other on rare earth issues and launched "rare earth wars" for many times. China has suffered a lot of losses in the past. Fortunately, it has been able to attack continuously in recent years, and the United States and Japan have begun to fear China's influence in the field of rare earth.
Why has rare earth become a strategic resource? On the rare earth issue, how did the United States, Japan and Europe "encircle and suppress" China? How should China attack? Uncle Ku will talk to you today.
1、 Rare earth in China
Most people may not know much about rare earth and how it has become a strategic resource comparable to oil.
In short, rare earth is a group of typical metal elements. The reason why it is extremely precious is not only because its reserves are scarce, non renewable, and it is difficult to separate, purify and process;
Moreover, because it is widely used in agriculture, industry, military and other industries, it is an important support for new material manufacturing and a key resource related to the development of cutting-edge national defense technology. It is known as the "universal land".
——In industry, rare earths are "vitamins".
It plays an irreplaceable role in the fields of fluorescence, magnetism, laser, optical fiber communication, hydrogen storage energy, superconductivity and other materials. If you want to replace rare earth, you can't do it unless you have extremely superb technology.
——Militarily, rare earth is the "core".
At present, almost all high-tech weapons have rare earth, and rare earth materials are often located in the core of high-tech weapons.
For example, the "Patriot" missile of the United States used more than 3kg samarium cobalt magnets and neodymium iron boron magnets in its guidance system to focus electron beams in order to accurately intercept incoming missiles. The laser rangefinder of M1 tank, the engine and light and solid fuselage of F-22 fighter depend on rare earths;
A former US military officer even said: "the incredible military miracles in the Gulf War and the ability of the United States to control the asymmetry of the war process in local wars after the cold war, in a sense, rare earths have achieved all this."
F-22 fighter (picture source: Baidu Encyclopedia)
——In life, rare earths are "everywhere". Our mobile phone screen, led, computer, digital camera... Which does not use rare earth materials?
It is said that every time four new technologies appear in the world today, one of them must be related to rare earth!
What would the world be like without rare earths?
On September 28, 2009, the Wall Street Journal answered this question - without rare earths, we would no longer have TV screens, computer hard drives, optical fiber cables, digital cameras and most medical imaging devices.
Rare earth is the element that forms a strong magnet. Few people know that a strong magnet is a crucial factor in all missile orientation systems in the U.S. Defense inventory. Without rare earth, you have to bid farewell to space launch and satellites, and the global oil refining system will stop. Rare earth is a strategic resource that people will pay more attention to in the future.
The phrase "there is oil in the Middle East and rare earth in China" shows the status of China's rare earth resources.
From a picture, China's rare earth reserves are "unparalleled" in the world. In 2015, China's rare earth reserves were 55 million tons, accounting for 42.3% of the world's total reserves. It is the first in the world. China is also the only country that can provide all 17 kinds of rare earth metals, especially the heavy rare earth with prominent military use. China has a larger share.
Bayan Obo mine in China is the largest rare earth mine in the world, accounting for more than 90% of the reserves of rare earth resources in China. It is known as the "rare earth capital". Compared with China's monopoly potential in this field, I'm afraid even the organization of Petroleum Exporting Countries (OPEC), which controls 69% of the world's oil trade, will feel inferior.
(Na means no output, K means small output, which can be ignored. Data source: American Statistics Network)
China's rare earth reserves and production are so mismatched. From the above figure, although China has high rare earth reserves, it is far from being "exclusive".
However, in 2015, the global rare earth mineral volume was 120000 tons, of which China contributed 105000 tons, accounting for 87.5% of the world's total output!
In the case of insufficient exploration, the existing rare earths in the world can be mined for nearly 1000 years, which means that rare earths are not so scarce all over the world. China's influence on global rare earths is more focused on production than reserves.
2、 It was really sold as dirt
China's rare earth reserves and production are far ahead. Reasonably speaking, it should be able to control the world rare earth prices and make a lot of profits from rare earth exports?
The opposite is true!
China's rare earths have been sold at very low prices for a long time. The story is just a history of blood and tears. It sounds heavy and sad.
In the 1960s, because the domestic rare earth production process and technology were very backward, during that period, the United States monopolized the supply of global rare earth resources. China could only export rare earth minerals to foreign countries at a low price, and then import rare earth products at a high price.
Some countries regard rare earth production technology as a top secret and impose a blockade on China. China can only sell such important mineral resources as the most primitive raw material at a low price to countries that master the core development and utilization technology. The severe reality forces China to speed up the development of rare earth separation and purification technology.
At critical times, there are always some "backbones" who stand up. In 1972, Xu Guangxian, the "father of China's rare earths", began an "unprecedented" attempt in the field of rare earth separation and purification technology in China.
The chemical properties of 17 rare earth elements are very similar, so it is very difficult to separate and purify. At that time, the mainstream choice of rare earth separation in the world was "ion exchange method" and "fractional crystallization method". The separation cost of both methods is very high, and the purity of rare earth elements extracted is low, which is not suitable for large-scale industrial production.
Xu Guangxian, the "father of rare earth in China", works in the laboratory with his wife
Xu Guangxian and others first adopted the extraction technology studied for many years, and finally successfully completed this urgent military task. The separation coefficient of praseodymium and neodymium broke the world record, and realized the industrial production of high-efficiency extraction and separation of rare earth with push-pull system for the first time in the world.
After 1990, "market-oriented reform" has become the most dazzling word in China. Small and medium-sized state-owned enterprises are generally restructured into private enterprises through the introduction of foreign capital or private capital, "profit maximization" has become an open proposition and goal of action, and "fast water flow" has become the action guide of most production enterprises.
The rare earth industry was a high profit industry at that time. Local enterprises and private enterprises poured in one after another. Under the planned system, the production process invented by Xu Guangxian, the "father of China's rare earth", did not obtain patent protection. The technology spillover caused by the "job hopping" of technicians in state-owned enterprises led to a significant reduction in the threshold of rare earth production, and countless rare earth production enterprises broke out. Under the banner of "opening to the outside world", China almost adopted open production Under the policy of open supply and the temptation of short-term profits, China's rare earth production and export expanded simultaneously.
At that time, China did not realize the importance and strategy of rare earth resources, and even took rare earth export as the main source of foreign exchange.
In the early 1980s, China's single rare earth output was about 20 tons, reaching 80000 tons in 2006, about 4000 times that in the early 1980s!
China's annual rare earth output has accounted for 90% of the world's rare earth output; Driven by huge production capacity, China's exports of rare earths increased by nearly 10 times from 1990 to 2005, accounting for 80% of the world's total exports, becoming the main resource supply place for global rare earth finished product manufacturers.
Illegal mining of rare earths is shocking!
Behind the rapidly growing export volume is the vicious competition launched by countless rare earth enterprises. Bargaining has become the norm in the market, resulting in a sharp decline in international rare earth prices.
From 1990 to 2005, the price of rare earth ore fell from US $11700 / ton to US $7430 / ton, and the international single rare earth price fell by 30% - 40%.
The decline in prices has led rare earth production enterprises to rely more on scale expansion. In 2005, China's annual production capacity of rare earth smelting and separation reached 200000 tons, which has more than doubled the annual industrial demand of the world.
It is hard to imagine that there has been a vicious price war for rare earth metals as strategic resources. In fact, Chinese enterprises are opening their doors and supplying strategic resources to the world at no cost!
At that time, China's rare earths were really sold at a low price as soil.
3、 The United States, Japan and Europe took the opportunity to "collect wool" from China
The rapid expansion of China's rare earth production and the continuous decline of prices have created conditions for the United States and Japan to accelerate the development of high-tech rare earth materials and related products, and also provided a heaven given opportunity for the so-called "strategic reserves" of these countries.
They began to "collect" Chinese wool.
While the global demand for high-tech electronics, lasers, communications, superconductors and other materials is growing geometrically, the United States, Japan and other developed countries, on the one hand, continue to increase the technological innovation of rare earth metals and launch a large number of high-tech military equipment and civilian consumer goods that rely on rare earth resources, on the other hand, accelerate the pace of strategic reserve of rare earth resources.
In the 1990s, the United States, Australia, Canada and other countries with rare earth mines generally implemented the policy of restricting or stopping the development of their own rare earth mines, and instead imported them from China as strategic reserves.
In fact, from the above chart, we can see that the rare earth reserves of the United States are 13 million tons, accounting for about 10% of the world's reserves. Relatively speaking, it is also very rich. However, the United States does not mine its own rare earth mine. Instead, it has sealed the largest rare earth mine in China, mantingpas mine, comprehensively stopped the mining of molybdenum production and other rare earth mines, and imported a large number of rare earths from China every year for strategic reserves.
As a result, the high-quality single rare earths purchased and stored by the United States, Japan and other countries can be used for industrial production for at least 20 years (some media reported that they have been used for more than 40 years). The resource trade and production enterprises in developed countries have completely controlled the international rare earth prices, while China's rare earth reserves have fallen sharply.
According to Hong Kong's Wen Wei Po, China's rare earth reserves were close to 90% of the global total more than a decade ago, but now they are less than 50%.
According to the data of the Ministry of land and resources, only 6 of the 45 major mineral resources required for China's modernization can guarantee the demand by 2020. According to the current mining and export scale, China will change from a large country with tungsten, antimony and rare earth resources to a small country in 30-50 years.
Academician Xu Guangxian, who has made great contributions to China's rare earth industry, once said bitterly: "rare earth resources are very valuable, especially in the five southern provinces, which are very valuable medium and heavy rare earths. The industrial reserves are 1.5 million tons. Now more than 900000 tons have been mined, leaving only 600000 tons.
If we don't protect it, according to the current mining speed, the mining will be finished in 10 years! At that time, we need to buy from the United States and Japan. They may sell to us at a price of more than 100 times or thousands of times! "
What is more distressing is that we have opened our door to supply the world's rare earth resources at low prices. Instead of gaining understanding and respect from the United States, Japan and Europe, we have intensified our demand.
When China took corresponding export quotas, export restrictions and other measures to reduce rare earth exports out of consideration of standardizing mining and protecting the environment, the United States, Japan and Europe couldn't sit still and began to sue the World Trade Organization on the grounds of China's raw material control in 2009.
In October 2010, yuichiro Tanyu, Ambassador to China of Japan, a major rare earth importer, called ambassadors of Jimei, Britain, Germany, France and other countries to ask China to ease its export regulations on rare earth elements.
In December of that year, after China announced the first batch of rare earth export quotas in 2011, the United States, Japan and Europe "expressed concern" one after another.
On July 5, after the WTO released the violation of China's export restrictions on nine kinds of raw materials, the EU, as one of the complainants, immediately issued a statement welcoming it that day.
The United States, Japan and Europe have also accused China's rare earth export restrictions of pushing up international market prices and damaging billions of dollars of trade volume of western enterprises.
The EU also complained that the output value of enterprises affected by China's policy of restricting the export of raw materials accounted for about 4% of the EU's total industrial output value, involving about 500000 employed people.
Therefore, they believe that they should strike while the iron is hot and continue to sue China for violations of rare earth export restrictions, so as to ensure the demand for rare earths.
In the following years, the United States, Japan and Europe also went to the WTO from time to time to sue China on the export restriction of rare earths, and the WTO basically ruled that China lost the lawsuit.
Some scholars said, "the world only needs 120000 tons of rare earth a year, which is a very small amount, and many of them are reserved by countries with strategic foresight... Those application powers that really need (rare earth) have long stored a large amount of China's rare earth at a low price, so China's regulation of rare earth will not threaten them at all.
They hype wildly. In fact, they want China to continue to supply them with rare earth at an unreasonable low price and consume China's strategic resources with unique advantages... This is the way several rare earth importing countries compete with China. "
Even their own people can't stand this bandit logic.
Germany's "South German newspaper" published a commentary pointing out that the cheering of western developed countries on the WTO judgment is inappropriate or even hypocritical, because for many years, the world has benefited from China's provision of rare earths at a very low price.
Prestowitz, director of the US Institute of economic strategy, believes that China's long-term economic strategy to restrict rare earth exports is to get rid of its status as a pure commodity supplier and produce products with high added value, high-tech content and high-tech proficiency.
Both Britain and the United States have done this in history. Countries that become rich in this way now think that such things are against the rules, which sounds unreasonable.
4、 Rare earth can't be sold at a low price!
In addition to the loss of strategic resources, the destruction of the environment and the "unspeakable suffering" in the WTO, there is also a "resource curse" caused by the over exploitation of rare earth and low-cost export.
We all know that one of the secrets of the economic rise of developed countries is that important resources, as raw materials necessary for production, were invested in high-end economic activities at that time.
In other words, good steel must be used on the blade. From the perspective of economic history, important natural resources have played a great role in promoting the industrialization take-off stage of developed countries.
For example, coal, as the basic energy of the first industrial revolution, was densely distributed in the deposits in British industrial areas, which injected a steady stream of power into the early British Industrial Revolution.
Martin Jacques, the author of the best-selling book "when China rules the world", believes that the 19th century was in Britain, not in Europe