Why Western countries press China to export rare earth

Production of rare earth result in the huge environmental destruction

At the request of the European Union (EU), the United States and Japan, the World Trade Organization (WTO) organized a special group on July 23, investigating, discussing and settling about China's export control measures on rare earth elements, tungsten and molybdenum.

In March, the E.U., the United States and Japan resorted China's export restriction policies on tungsten, molybdenum and 17 rare earth elements to the WTO. On June 27, they again demanded the WTO to launch the dispute settlement mechanism and set up special group so as to solve the dispute on China's controlling exports of rare earth elements and some other metallic elements.

What is their intention to deliberately provoke rare earth dispute?

China possesses less than 50 percent of total rare earth reserves in the world but it provided the world with 90 percent of rare earth output in 2001 and 97 percent in 2010.

However, so large world market share did not bring monopoly profits to China and the global rare earth had been maintaining at a super low price by 2005. Supported by local governments of all levels, the large, medium and small enterprises poured in rare earth industry and began excessive competition. Driven by short-term profits, plenty of small enterprises predatorily exploited rare earth elements, bringing the productivity of the whole rare earth industry down. The recovery ratio of rare earth exploited by state-owned enterprises only reaches to 60 percent per ton, that of large private enterprises is 40 percent and that of illegal enterprises is only 5 percent. The rare earth resource was squandered a lot, thus causing severe environmental problem.

In order to protect environment and the rare earth resource, Chinese government tried to control the predatory production and exportations of the rare earth resource. The export quota has been reduced to about 30,000 tons from original 65,000 tons from 2005 to 2010, which greatly decreased overexploitation of rare earth resource.

If anything, China has exported too much rather than too little rare earths. Related countries should resume their own production of rare earths, instead of forcing China to increase exports of the valuable resources. It is extremely selfish of Western countries to force China to increase rare earth exports and expect to continue buying the resources at unreasonably low prices, without the regard for the severe environmental damage China has suffered.

Of course, China could say “no” to unreasonable requests from Western countries, but Western-led international trade rules would place it under heavy pressure. China must seriously reflect on why it has sold rare earths at unreasonably low prices, and now even face groundless accusations by Western countries after paying a high environmental price.

The United States has implemented high-technology exports restriction to China for long time. During the Cold War, it initiated the Coordinating Committee for Multilateral Export Controls (CoCom) to put an arms embargo on socialist countries like China. After the Korean War broke out, a “China sub-committee” of the CoCom was established to impose stricter embargo on China than on the Soviet Union and Eastern European countries. Especially the forbade shipment of 207 items beyond the CoCom list were also forbade to China. After the end of the Cold War, the United States played a leading role in replacing the CoCom with the seemingly less strict Wassenaar Arrangement, which is in essence aimed at restricting exports to China.

Despite several reforms in recent years, the United States has retained a relatively strict export control policy toward China. In 2007, the U.S. Department of Commerce published the “Revisions and Clarification of Export and Reexport Controls for the People’s Republic of China (PRC); New Authorization Validated End-User; Revision of Import Certificate and PRC End-User Statement Requirements,” stating that nine items such as aircraft and aircraft engines, avionics, navigation systems, and communications equipment “have the potential to contribute to” China’s military buildup, and are thus not allowed to be exported to China. The U.S. export controls seem to only target items concerning national security such as military and aerospace products, but the ambiguous criteria as well as complicated examination and approval procedures actually constitute a serious obstacle to China’s high-tech imports.

UN, DR Congo helicopter gunships attack rebels

The United Nations and Democratic Republic of Congo army used helicopter gunships on Thursday to attack army mutineers thought to be threatening the main eastern city of Goma.

Three helicopters from the UN country mission and two from the DRC army (FARDC) were seen around the villages of Nkokwe and Bukima, where the so-called M23 rebels are thought to have positions.

The UN and the Congolese army sent MI24 and MI25 helicopters flown by Ukrainian pilots. The gunships, first made by the Soviet Union, strafed hillsides with 30mm rounds and fired rockets, a UN source said.

"We made several passes on rebel positions," the UN official said.

The UN and the troops from the Democratic Republic of Congo, which claims the rebels are a Rwandan proxy, had earlier deployed tanks around Goma in Nord-Kivu province.

However, the rebels said they had no plans to seize the regional capital and only wanted to negotiate with the government in Kinshasa.

"The FARDC are currently attacking our positions, but they don't know where we are. There's no problem," a colonel from the rebels said.

The M23 rebels — named after a failed 2009 peace deal signed on March 23 — are led by Bosco Ntaganda, nicknamed the "Terminator", who is wanted by the International Criminal Court for recruiting child soldiers a decade ago.

His co-accused and former boss Thomas Lubanga was sentenced to 14 years in jail on Tuesday.

The mutineers are ex-rebels who were integrated into the regular army in 2009 as part of a deal that followed their failed 2008 offensive on Goma, under the command of Tutsi leader Laurent Nkunda.

They defected in April, ostensibly over pay, but experts argue Ntaganda and his men are flexing military muscle to clinch further rights over the area's lucrative mines.

In Thursday's gunship attacks, a group of women working in fields near Bukima claimed they were caught in the crossfire.

"We were hiding in the banana groves when the helicopters opened fire. There was one person with us who was hit and died immediately," said one woman who asked not to be named.

Nkokwe and Bukima are on the western border of the Virunga national park, some 50km from Goma and home to critically endangered mountain gorillas and the location of two active volcanoes.

The M23 mutineers had launched an offensive in recent days, easily overwhelming the FARDC. Around 600 regular troops and tens of thousands of civilians were forced to seek refuge in Uganda.

"Our mission is not to go to Goma. We are strong but we are also disciplined," M23 spokesman Vianney Kazarama said.

The mutineers had seized a number of towns along the Ugandan border and promptly withdrew from all but Bunagana.

"We have pulled out of those towns, our mission is not to control them. What we want is that the Congolese government sit down at the negotiating table," Kazarama said.

Almost uninterrupted conflict over DR Congo's vast mineral resources — which include gold, diamonds, coltan, tin, tungsten and many others — has left at least two million people dead since 1999, say rights groups.

A diplomat in Kinshasa said an M23 offensive on Goma appeared unlikely.

Direct Line in play as buyout shops circle

Blackstone Group LP (BX.N) and Bain Capital LLC are working on a possible joint offer for Direct Line, a person directly familiar with the plans said on Sunday. Blackstone declined to comment while Bain did not respond to a request for comment.
Another group, comprising KKR & Co LP, Apax Partners LP and BC Partners Ltd, is putting together a rival offer, the Sunday Times reported earlier, quoting city sources as saying both groups were planning to make moves at the end of the month.
KKR, Apax, BC Partners and RBS did not respond to a request for comment.
European regulators have ordered RBS to sell or float Direct Line by the end of 2013 to counterbalance the competitive advantage it received from a British government bailout, which left it 82 percent state-owned.
The buyout interest is boon for RBS, which is in the process of rebuilding its balance sheet and has said it wants to list Direct Line in the fourth quarter. Analysts have estimated it could be valued at around 3 billion pounds ($4.66 billion).
Tungsten, the British buyout vehicle co-founded by financier Edmund Truell, had said in May it could bid for Direct Line but Truell said earlier this month that he was not close to any deal to buy RBS's insurance unit.
On Friday, sources told Reuters RBS had added eight banks to help with Direct Line's IPO. The public offering of a minority stake is being run by Goldman Sachs, Morgan Stanley and UBS, who are acting as joint book runners.
Founded in 1985, Direct Line also trades under the Churchill and Privilege brands and owns the Green Flag breakdown recovery service.
RBS needed a 45 billion pound bailout in 2008 at the height of the financial crisis as its acquisition of Dutch bank ABN AMRO in 2007 pushed it close to collapse.
RBS' lengthy turnaround process has made the timetable for any sale of Britain's stake in the troubled bank uncertain, prompting some speculation that the government may consider selling some of the stake at a loss at first.

China Tungsten Industry Report

The wide application of touch screen technology in such electronics as smart phones and tablet PCs boosts the demand for tungsten, and the exploitation of tungsten is circumscribed in many countries, as a result,there is acute conflict between tungsten supply and demand, the prices of tungsten products kept rising in 2010-2011 and still remained high in Q1 2012 though fell slightly.

China, the country with the richest tungsten resources in the world, holds 65% of the global tungsten ore reserves and accounts for around 85% of the global tungsten ore supply. In 2011, China's output of tungsten ore concentrates (WO3 65%) hit all-time record high of 135,700 tons, up 4.60% over 2010. Restricted by the limited new exploited resources and the policies concerning total exploration amount control and export quotas, China's output of tungsten ores will witness little scope for growth in the coming years and the global tungsten market will present tight supply.

In 2011, Jiangxi Province remained as the largest producer of tungsten ore concentrates in China with an output of 65,830 tons, accounting for 48.5% of national exploration amount, followed by Hunan Province with an output of 31,150 tons, which could be mainly attributed to their abundant tungsten ore resources together making up more than 50% of total tungsten ore reserves in China.

Jiangxi-based Chongyi Zhangyuan Tungsten Co., Ltd., Jiangxi Tungsten Industry Group Co., Ltd., Jiangxi Rare Earth and Rare Metals Tungsten Group Corporation and Jiangxi Xiushui Xianglushan Tungsten Co., Ltd., and Hunan-based Hunan Nonferrous Metals Holding Group Co., Ltd. and Hunan Chenzhou Mining Group Co., Ltd. are the major tungsten production and processing enterprises in China and have relatively complete industrial chain. In 2011, benefiting from the rising prices of tungsten products, these enterprises delivered robust performance. Meanwhile, the desire for profit and the constraints on tungsten ore resources have urged them to expand downwards the industry chain.

For instance, Chongyi Zhangyuan Tungsten began to carry out the technological transformation project of high-performance and high-precision coated tips since August 2011. The Phase I will complete installation and debugging in H2 2012 and start preliminary production in Q4 2012. It is estimated that the project will provide the company with 100 tons of cemented carbide tool capacity and RMB280 million of revenue upon full completion in 2014.

Xianglushan Tungsten possessed 10,000 tons of APT production capacity and added one tungsten oxide production line in 2011 and will establish workshop for cemented carbide micro-drills in 2012.

Hunan Nonferrous Metals has strengthened the R & D of cemented carbide products and invested in the technological transformation projects of high-performance ultra-fine grain cemented carbide production line and of special shaped cemented carbide & deep processing line to increase its market share in Chinese cemented carbide field.

It is in the report that covers the followings:

• The reserves and distribution of global tungsten resources, and the supply & demand of global tungsten industry;
• The reserves and distribution of Chinese tungsten resources, and the supply & demand of Chinese tungsten industry;
• Annual indexes of China's total tungsten exploration amount control and export quotas, and indexes allocated to enterprises and regions;
• Competition pattern of Chinese tungsten industry;
• The price changes of global and Chinese tungsten products;
• Import and export of major tungsten products in China;
• Operation of major tungsten production and processing enterprises in China, such as revenue and profit, capacity and output of tungsten ores, main mining resource and production enterprises and their tungsten product business development, etc.

S.Korea's rare earth imports from China surge

South Korea's rare earth imports from China surged last month due to a fall in import prices, customs data showed Tuesday.

South Korea purchased a total of 126 tons of rare earth material from China in June, up 36.3 percent from a month earlier, according to the Korea Customs Service (KCS).

In terms of value, rare earth import from China edged down 0.4 percent on-month to $3.8 million in June, indicating that falling import prices contributed mainly to the June surge in import volume.

Rare earth materials, including scandium and yttrium, are key components for modern-day technologies such as hybrid electric vehicles, liquid crystal display (LCD) and other high-tech products.

Rare earth imports from Japan declined 17.3 percent on-month to 57 tons last month, while import from Germany jumped 80.9 percent to 12 tons over the same period.

Meanwhile, imports of magnesium from China soared 73.3 percent on-month to 903 tons in June, but tungstenimports declined 24.8 percent to 36 tons. Cobalt imports from China expanded 39.2 percent to 436 tons over the cited period.

Bottom Line

• FOREIGN POLICY. DLA Piper is lobbying for the Palestinian Investment Fund regarding “issues related to economic development in the Palestinian territories,” according to lobbying disclosure records. One of the lobbyists on the account, Matthew C. Bernstein, is a partner at the firm.

• BANKING. David L. Horne LLC is lobbying for the Community Mortgage Lenders of America on “affordable housing, mortgage finance and related issues.” David Horne, former chief of staff for the Department of Housing and Urban Development, is the sole lobbyist on the registration.

• MILITARY. American Defense International Inc. is lobbying for TCOM to obtain “meetings with officials about JLENS program,” according to disclosure records. Michael Khatchadurian, the former communications liaison for the chairman of the Joint Chiefs of Staff, is lobbying for the company. 

• NATIVE AMERICAN AFFAIRS. JC Watts Companies is lobbying for the Muskogee Creek Nation regarding “land into trust, Indian health, Indian Housing, Bureau of Indian Affairs programs and funding.” Former Rep. J.C. Watts (R-Okla.) and Steve Pruitt, former director of the House Budget Committee, are on the account.

• MINING. J.A. Green and Co. is lobbying for Global Tungsten & Powders on “issues related to government sales of tungsten.” Jeffrey Green, a former counsel for the House Armed Services Committee, is the lobbyist on the account.

The Podesta Group is lobbying for Uranium One Inc. regarding “international mining projects.” Paul Brathwaite, former executive director of the Congressional Black Caucus, and Stephen Rademaker, former senior counsel and policy director for national security affairs for then-Senate Majority Leader Bill Frist (R-Tenn.), are lobbying for the company.

 • PUBLIC RADIO. Navigators Global LLC is lobbying for National Public Radio on “issues related to the public radio system and National Public Radio.” A slew of former government officials are listed on the account, including Christopher Cox, former special assistant to President George H.W. Bush; and Philmore B. Anderson, former special assistant to former Vice President Dan Quayle.

 • CHARITIES. Patton Boggs LLP is lobbying for the Lance Armstrong Foundation on “issues related to support for the foundation’s activities.”

U.S. Accuses China of Holding up Rare Earths Exports

In a move that has implications for Ohio’s manufacturing industry, U.S. Trade Representative Ron Kirk announced Wednesday that the U. S. has requested the World Trade Organization take up a dispute that China is unfairly restraining its exports on rare earths, tungsten and molybdenum.
The European Union and Japan also have requested panels on this matter today.
“These materials are key inputs in a multitude of U.S. manufacturing sectors and American-made products, including hybrid car batteries, wind turbines, energy-efficient lighting, steel, advanced electronics, automobiles, petroleum and chemicals,” Kirk said.  “It is vital that U.S. workers and manufacturers obtain the fair and equal access to raw materials like rare earths that China specifically agreed to when it joined the WTO.”
Earlier this year, the United States won a WTO challenge against China’s export restraints on nine other industrial materials.  Kirk said China argued in that case that its export restraints could be justified as conservation or environmental protection.
Kirk said that China’s export restraint measures on rare earths, tungsten and molybdenum “appear to be part of a troubling industrial policy aimed at providing substantial competitive advantages for Chinese manufacturers at the expense of foreign manufacturers.”
He added that because of China’s position as a leading global producer of these materials, its export restraint measures give China the ability significantly to affect global supply and pricing.  The measures can provide important advantages to China’s downstream producers, to the detriment of their U.S. and other foreign counterparts, Kirk said.

Barney Frank Unsure If Wedding Ring Made From Conflict Mineral Regulated By Dodd-Frank

WASHINGTON -- Rep. Barney Frank (D-Mass.) and his new husband don't know if their wedding rings contain a conflict mineral regulated by the landmark financial reform law that bears Frank's name, according to a spokesman for Frank.

The rings are made of black diamonds set in tungsten, which is a precious metal commonly mined in the war-ravaged Democratic Republic of the Congo. Congolese warlords have channeled profits from metals like tungsten, often used in consumer electronics, to fuel a bloody conflict that has raged in the country for more than a decade.

The Dodd–Frank Wall Street Reform and Consumer Protection Act contained a provision that requires companies to disclose the use of several conflict minerals -- includingtungsten -- in their products if they come from the DRC and surrounding countries. Like many of the regulations promulgated by Dodd-Frank, which was signed into law two years ago this Saturday, the final details of the conflict minerals regulation are still being hammered out by federal bureaucracies and industry lobbyists.

"Congressman Frank and his husband do not know the source of the tungsten in their rings -- the provision of the law that would make it easier to find out the source of the metal isn't in effect yet," wrote Harry Gural, Frank's communications director, in an email to The Huffington Post.

A previous report from the Washington Examiner, which originally aired the allegations about Frank and his husband's rings, said that "some tungsten is illegal to use" as a result of Dodd-Frank.

The relevant provision "does not outlaw tungsten, but it requires public companies that are listed on U.S. stock exchanges to disclose the source of the metal," Gural said. "This provision is not in effect yet, but the SEC will release the language of its final rule on the issue at the end of August."

Earlier this month, Frank signed a letter with 58 other members of Congress that urged the Securities and Exchange Commission to finally implement the rule, which has been delayed for over a year. A report from the Government Accountability Office, released on Monday, cited "intense stakeholder interest and input" as a primary reason for the delay. The SEC had over 140 meetings with affected industries and human rights groups, which have engaged in a vigorous lobbying tug-a-war over the provision.

Highlighting the Best Golf Club-Baffler T-Rail

Baffler has been part of Cobra’s existence as a top equipment maker for decades and refers to a sole design that facilitates getting the ball up in air quickly and without compromising forgiveness.

Tom Preece, Cobra vice-president (research and development), said the new generation of Baffler hybrid has a lot of new technology to add to performance.

“We’ve added tungsten material to the rails of the baffler,” he said on cobragolf.com. “Tungsten is a heavier, denser material than steel, which helps us lower the centre of gravity and move it deeper (in the club head), which makes it easier to get the ball up in the air and produces a nice, boring, low- speed ball flight.”

The Baffler T-Rail is available in lofts of 17, 19, 22, 25, 28 and 31. Suggested retail price is $160.

Direct Line in Play as Buyout Shops Circle

Direct Line, Britain's biggest motor insurer run by government-owned Royal Bank of Scotland (RBS.L), is a takeover target for private equity groups looking to pre-empt what would be one of the biggest initial public offerings in London this year.

Blackstone Group LP (BX.N) and Bain Capital LLC are working on a possible joint offer for Direct Line, a person directly familiar with the plans said on Sunday. Blackstone declined to comment while Bain did not respond to a request for comment.

Another group, comprising KKR & Co LP, Apax Partners LP and BC Partners Ltd, is putting together a rival offer, the Sunday Times reported earlier, quoting city sources as saying both groups were planning to make moves at the end of the month.

KKR, Apax, BC Partners and RBS did not respond to a request for comment.

European regulators have ordered RBS to sell or float Direct Line by the end of 2013 to counterbalance the competitive advantage it received from a British government bailout, which left it 82 percent state-owned.

The buyout interest is boon for RBS, which is in the process of rebuilding its balance sheet and has said it wants to list Direct Line in the fourth quarter. Analysts have estimated it could be valued at around 3 billion pounds ($4.66 billion).

Tungsten, the British buyout vehicle co-founded by financier Edmund Truell, had said in May it could bid for Direct Line but Truell said earlier this month that he was not close to any deal to buy RBS's insurance unit.

On Friday, sources told Reuters RBS had added eight banks to help with Direct Line's IPO. The public offering of a minority stake is being run by Goldman Sachs, Morgan Stanley and UBS, who are acting as joint book runners.

Founded in 1985, Direct Line also trades under the Churchill and Privilege brands and owns the Green Flag breakdown recovery service.

Direct Line, Britain's biggest motor insurer run by government-owned Royal Bank of Scotland (RBS.L), is a takeover target for private equity groups looking to pre-empt what would be one of the biggest initial public offerings in London this year.

Blackstone Group LP (BX.N) and Bain Capital LLC are working on a possible joint offer for Direct Line, a person directly familiar with the plans said on Sunday. Blackstone declined to comment while Bain did not respond to a request for comment.

Another group, comprising KKR & Co LP, Apax Partners LP and BC Partners Ltd, is putting together a rival offer, the Sunday Times reported earlier, quoting city sources as saying both groups were planning to make moves at the end of the month.

KKR, Apax, BC Partners and RBS did not respond to a request for comment.

European regulators have ordered RBS to sell or float Direct Line by the end of 2013 to counterbalance the competitive advantage it received from a British government bailout, which left it 82 percent state-owned.

The buyout interest is boon for RBS, which is in the process of rebuilding its balance sheet and has said it wants to list Direct Line in the fourth quarter. Analysts have estimated it could be valued at around 3 billion pounds ($4.66 billion).

Tungsten, the British buyout vehicle co-founded by financier Edmund Truell, had said in May it could bid for Direct Line but Truell said earlier this month that he was not close to any deal to buy RBS's insurance unit.

On Friday, sources told Reuters RBS had added eight banks to help with Direct Line's IPO. The public offering of a minority stake is being run by Goldman Sachs, Morgan Stanley and UBS, who are acting as joint book runners.

Founded in 1985, Direct Line also trades under the Churchill and Privilege brands and owns the Green Flag breakdown recovery service.

RBS needed a 45 billion pound bailout in 2008 at the height of the financial crisis as its acquisition of Dutch bank ABN AMRO in 2007 pushed it close to collapse.

RBS' lengthy turnaround process has made the timetable for any sale of Britain's stake in the troubled bank uncertain, prompting some speculation that the government may consider selling some of the stake at a loss at first.

RBS needed a 45 billion pound bailout in 2008 at the height of the financial crisis as its acquisition of Dutch bank ABN AMRO in 2007 pushed it close to collapse.

RBS' lengthy turnaround process has made the timetable for any sale of Britain's stake in the troubled bank uncertain, prompting some speculation that the government may consider selling some of the stake at a loss at first.

Portugal Turns to Natural Resources in Crisis Times

In the two centuries Rome ruled the Atlantic coast of Iberia, the army mined and shipped home 129,000 ounces of gold and 25 million ounces of silver.

More than two millenia later, faced with recession, record-high unemployment and a stubbornly high debt, modern Portugal is following in the Romans' footsteps to take advantage of its natural assets.

The new government is trying to draw mining giants to extract everything from iron ore to gold, silver and tungsten in the hope of cashing in on the 4 percent of revenues it will gain from each operation.

Mining giant Rio Tinto and the Portuguese government are currently putting the finishing touches on an experimental concession contract to mine iron ore in the north of the country in an investment that could be worth over 1 billion euros.

"With the strategy we have been pursuing for the mining sector, Portugal's resources and its potential could rise up to twice current gross domestic product, which is to say more than 200 billion euros," said Ricardo Pinto, a mining advisor at the economy ministry, estimating the value of all possible future mining projects.

It has granted 30 mining concessions since it came to power last year, which should add up to about 300 million euros in initial investments. About half of the concessions are at the prospecting stage, but many are expected to lead to production soon, drawing potentially much bigger investments.

The gold deposits currently being investigated at Boa Fe in sunny Alentejo will be extracted in an open-air mine, which takes much less time to activate than an underground mine. Existing mines that have been abandoned are now being reactivated.

"We see mining taking a key role in Portugal's recovery. The geology and infrastructure is excellent and it is a void the private sector will fill," said Peter Rose, an analyst at ondon-based Fox Davies, an independent natural resources investment bank.

Portugal's mining industry is a "pretty compelling story," Rose said, thanks to the high quality of resources, good local infrastructure and modest wages.

Tungsten Carbide and Possible Military Applications

Tungsten carbide (WC) ceramics are extremely hard and exhibit great potential for use in military application.Tungsten carbide (WC) is a more effective material than Kevlar or steel when used for body armor. Tungsten carbide possesses a high measure of hardness that indicates a high resistance to deformation. Also, the methods of production, namely Pulsed Current Activated Sintering (PCAS), can increase these natural properties. To conclusively prove that WC can be used as body armor components, the material must be tested by firing armor piercing munitions at samples of the material.

Congo Rebels Capture Mineral Transit Town

Fighters loyal to renegade Congolese Gen. Bosco Ntaganda have captured an important mineral transit town on Congo's eastern border, Ugandan and Congolese military officials said, potentially exacerbating the disruption of mineral exports from Africa's largest tin producer.

In a two-day offensive to take the town of Bunagana, rebel fighters overran Congo's United Nations-backed army positions using heavy artillery and rockets, the officials said. Hundreds of Congolese soldiers crossed the town's border with Uganda and have been detained by Ugandan forces.

A Congolese military official denied that their positions were overrun and said that the decision by some soldiers to retreat had been tactical.

The official, speaking by telephone from Goma, North Kivu's provincial capital, 45 miles from the fighting, said Congolese government forces still retained control of some surrounding villages and parts of Bunagana town.

"Fighting is still going on as we speak," the official said.

The conflict broke out in April after Mr. Ntaganda defected with hundreds of troops amid mounting pressure to have him arrested for war-crimes charges. Mineral exports have been hampered since May.

Bunagana is the main transit route for minerals from North Kivu through Uganda. Truckloads of valuable metals are then sent by road to the Kenyan port of Mombasa, where the bulk of Congo's minerals such as tin, coltan, gold and tungsten are exported to overseas markets.

The town, which straddles the Congo-Uganda border, is also a supply route for vital imports such as fuel and mining machinery for landlocked eastern Congo. Mineral dealers based in North Kivu, Congo, and Kampala, Uganda, said that at least 500 metric tons (551 short tons) of mineral ores are exported through the Bunagana border town every day. Because the country lacks proper mineral-processing facilities, it is hard to break down how much of each type of mineral ore is exported, local traders said.

The rebels, who call themselves the March 23 Movement, or M23, are loyal to Mr. Ntaganda, a former militia leader who initially joined the Congolese national army as part of a mediation effort but then broke away in April to resume his fight against the central government after being accused of war crimes by the International Criminal Court.

Like Mr. Ntaganda, the rebels are former members of a Tutsi-led militia, the National Congress for the Defense of the People, which was integrated into the national army as part of a 2009 peace accord.

Hundreds of Bunagana residents have fled across the border into Uganda in recent days, potentially overwhelming relief officials.

More than 40,000 refugees have crossed into Uganda since April to escape the fighting, according to the Uganda Red Cross Society.

The U.N. Security Council has called for a full investigation of reports of Rwandan support for the M23 rebels.

Until 2010, Congo accounted for at least 5% to 7% of global tin supplies, according to industry body the International Tin Research Institute.

China Domination of Tungsten Causes Fear

U.S. Sen. Robert Casey, D-Scranton, pressed the Department of Defense on Tuesday to speed release of tungsten from strategic stockpiles to preserve jobs at American manufacturers who depend on buying some of that supply.

Casey said in a letter that the industry is "dominated by China," and he was fearful that unless DOD acts quickly, hundreds of jobs will be lost overseas as well as the "intellectual capacity" to make parts necessary for national defense.

Figures from the U.S. Geological Survey show that last year, China produced 83 percent of the world's tungsten and kept a substantial amount for its own consumption. The United States, Europe and Japan consume 55 percent of the world's tungsten production while producing 5 percent, according to Ormonde Mining of Ireland.

Kennametal Inc., which has a plant in China, has expressed concern over the outlook for obtaining certain raw materials to continue American manufacturing operations. The industrial tooling manufacturer is based in Unity.

"It is our understanding that an interruption in the tungsten concentrate feedstock used by American tungsten manufacturers will force the shutdown of several production lines and eliminate hundreds of American manufacturing jobs," Casey said in his letter.

Two years ago, China began restricting exports of rare earth materials used in military weapons as well as domestic uses such as LED screens, other electronic goods and hybrid cars. Several companies outside of China began mining projects, but with mixed success.

Colorado-based Molycorp recently acquired a company to process some of the material in China, where rare-earth engineering is concentrated. Another project in Malaysia has been delayed for environmental reasons.

The Defense Department uses tungsten in "many strategically vital weapons systems," Casey said. He noted the country has 34 million pounds of tungsten reserves and had indicated it plans to release a maximum of 8 million pounds this year.

So far, he said, no tungsten has been released.

  

US, EU, Japan elevate rare earth complaint against China

A piece of recent news reported that the Office of U.S. Trade Representative has elevated a trade complaint by asking for the World Trade Organization to establish a dispute settlement panel to rule on U.S. claims that China is unfairly restraining exports of rare earth materials used in electronics and other products.

The European Union and Japan on Wednesday also requested a dispute settlement panel at the WTO, the USTR said in a press release. In March, the U.S., E.U. and Japan filed a WTO complaint, accusing China of using several types of export restraints on the rare earth materials, including export duties, export quotas, export and pricing requirements.

China produces more than 95% of the world's rare earth materials. The U.S. complaint covers rare earths, tungsten and molybdenum, used in the manufacturing of mobile phones, laptops and MP3 players as well as hybrid car batteries, wind turbines, steel and petroleum.

"These materials are key inputs in a multitude of U.S. manufacturing sectors and American-made products," U.S. Trade Representative Ron Kirk said in a statement. "It is vital that U.S. workers and manufacturers obtain the fair and equal access to raw materials like rare earths that China specifically agreed to when it joined the WTO."

When China joined the WTO in 2001, it agreed to eliminate export duties for rare earths and most other products, the USTR said.

"Despite China's characterizations, its export restraint measures on rare earths, tungsten and molybdenum appear to be part of a troubling industrial policy aimed at providing substantial competitive advantages for Chinese manufacturers at the expense of foreign manufacturers," the USTR said in its press release.

Representatives of the Chinese Embassy in Washington, D.C., didn't respond to a request for comment.

The WTO dispute resolution process has several steps. The whole process can take longer than a year if the dispute settlement panel's decision is appealed. Ultimately, the WTO could allow trade sanctions in a WTO dispute.

Tungsten Market Update

Steel prices fell in June, according to independent steel consultancy firm MEPS. The drop in prices, caused by falling raw material costs and a flood of imports due to the weak global economy, has put downward pressure on already flat US steel prices.

Ferro-tungsten prices fell over 3 percent in Europe compared to last week following a reverse tender internet auction that knocked $2.25/kg off the metal’s price. The European economy and summer slowdown have been putting a damper on ferro-tungsten prices.

China Gripping on Tungsten

As one article recently pointed out, China, have put tungsten on the radar of critical metals investors. Legendary investor Warren Buffett – who won’t invest in gold, but through a subsidiary of Berkshire Hathaway dumped $35 million on Woulfe Mining, a tiny tungsten junior in South Korea – must be on to something.

The fundamentals for tungsten, a crucial ingredient in toolmaking, including oilfield and mining drill bits, are indeed impressive. The metal that sold for around $50 a tonne in 2000 is now changing hands for $400/t, an eight-fold increase. For years China has had a lock on the supply of tungsten, producing some 80 percent of global consumption, but that is beginning to change as the country implements export restrictions and suspends mining permits in an effort to protect its domestic market. Other countries with tungsten deposits include Russia, Canada, South Korea, Bolivia, Austria, and Portugal – opening up possibilities for juniors eager to crack the Chinese monopoly. Tungsten, however, is not exactly easy to find. The British Geological Survey ranks it among the scarcest elements on earth – rarer than even rare earths. As supply tightens, the demand for the brittle grey and white metal is equally compelling. Tungsten is the hardest metal on the planet, 100 times more resistant than steel, and toolmakers have no substitute for it.

Sarantel Making Progress on Military Radio Contracts

Half of a “substantial” order received in February from a leading military radio manufacturer has now been shipped, Sarantel said, with the group on track to fulfil the remainder of the contract by next February.

This order will generate over US$2 million in revenues.

Meanwhile, the US army's "Rifleman radio"  (JTRS) programme, which uses Sarantel’s rugged GeoHelix GPS antenna, is also making progress, it said.

The JTRS programme was awarded by the US Army to Sarantel's US military sub-contractor customer in July last year.  

Initial operational tests and evaluations have since been completed in Fort Bliss, Texas and in Afghanistan.

There is no indication that the alleged US Defense rows have had an impact on the progress of this program, Sarantel added.

When it awarded the initial contract, the US army indicated it needed more than 190,000 Rifleman radios, which would generate revenues in excess of US$6 million for the group.

David Wither, Sarantel’s chief executive said: "We continue to see strong growth in our key military market and expect revenue flows to gain momentum in the second half of 2012 and into 2013. 

Sarantel's technology is a critical component to a number of very large  military communications programs and we expect these programs to be increasingly important in the coming years. 

The backing from of a leading military customer to secure the HSBC loan facility earlier this year, further supports the significance of Sarantel's technology to our military customers."

Shares rose 6 per cent to 0.41 pence.

Tungsten Supplies Under Threat

    MoneyWeek has reported that supplies of tungsten are desperately short.notes Don Miller in Resource Investor. “Tungsten prices have rocketed from about $180 three years ago to roughly $430 per metric ton today”.

  

    In a recent British Geological Survey report, tungsten even got right to the top of the 'endangered list' of metals of economic value.

    Why? It’s down to China. The country has been buying up raw supplies of tungsten and curbing exports of the metal. As the Chinese control 60% of the world’s reserves and 83% of global production these restrictions have had a big impact. In fact, China is now a net importer of tungsten and expects to use all its supplies to support its own manufacturing firms.

Sure, as we’ve pointed out before, the country’s growth rate is slowing fast, and could drop a lot further.Matthew Partridge said in February, despite this, the Chinese still plan to double their military spending by 2015. That will mean more weaponry – and extra need for tungsten to make bullets and missiles. So the shortage is likely to get much worse.

    

“That means the rest of the world is scrambling to find new resources and open new mines [which] takes a minimum of three years”, says Miller. Yet “tungsten mines are very difficult to operate, processing large amounts of material to harvest relatively small amounts of metal. No more than five mines supply most of the world’s tungsten outside China and Russia”.

  

  No wonder that the US and the EU have recently highlighted tungsten as a key strategic metal that needs stockpiling.

Tungsten Resource Upgrade

Last month Carbine Tungsten increased the Mount Carbine Inferred Resource by 19% to 47.4 million tonnes at 0.131% tungsten for a total of 62,305 tonnes of contained tungsten metal at a 0.05% cut-off.
Indicating the potential to increase the Resource further, the company earlier in the year identified major strike extensions to the mineralization to the northwest and southeast.

EU Asks WTO to Arbitrate in China 'tungsten and rare earth' Row

The European Union has asked WTO to arbitrate in a row about China's export restrictions on "rare earth" minerals.

Talks between China and the EU, along with the US and Japan, failed to resolve the dispute in April.

China, which produces 97% of the world's rare earths, could now face litigation from the WTO.

In addition to rare earths, the complaint covers tungsten and molybendum.

The EU, US and Japan complained to the WTO in earlier in the year, saying that China's increased export duties and reduced export quotas were unfairly benefiting its own companies.

Beijing says that its restrictions are needed to protect the environment, conserve supplies and meet domestic demand.

The World Can’t Do without Tungsten

IMC Group is one of the world’s largest metalworking product firms. It’s 80% owned by Warren Buffett’s holding company Berkshire Hathaway. And IMC has recently invested $80m in a mining project.

It isn’t in the US, or indeed anywhere near it. It’s at Sangdong, in South Korea, and it’s controlled by a firm called Woulfe Mining. The deal gives Buffett a 25% stake in what was the world’s most productive resource of one rare metal - tungsten.

What’s so special about tungsten? It’s hard to know where to begin.

Tungsten is ultra-hard, dense and strong. It’s also highly resistant to corrosion and wear. And it’s fire-proof - it has the highest melting point of all pure metals, and the second highest of all the elements after carbon.

Pure tungsten is used mainly in electrical products. But in alloy form – due to its hardness - tungsten has many applications, from industrial to military.

It’s employed in incandescent light bulbs, X-ray tubes and electrodes in arc welding. Tungsten carbide, a compound of tungsten and carbon that’s three times stiffer than steel, is used to make drill bits for oil and gas exploration, circular saws and jewelry. The metal’s ability to withstand extreme heat makes it irreplaceable in the manufacture of rocket engines.

In fact, global demand for the metal has been growing at around 6% a year for ages. And the world is now become totally dependent upon it. That’s because in most of the metal’s uses, there’s no alternative. Indeed, “without tungsten, Western manufacturing comes to an end”, Wolfe’s investor relations manager Nick Smith tells Tungsten Investing News.

What’s more, the future needs of high-tech industries are set to drive demand even higher. Tungsten is crucial for the manufacturing of electrodes used in solar panels and nuclear equipment. And it’s a vital component in touch screens of smart phones and tablet devices.

This means the world’s tungsten miners will need to lift overall output from last year’s 68,000 metric tonnes (m/t) to 96,000 m/t by 2016 just to keep pace with demand.