China, the global leader in rare earth production, is set to impose a new tax on rare earth minerals from April 1 the Ministry of Finance and the State Administration of Taxation has told rare earth producers in the country.
As reported in the Shanghai Daily, Zhang Zhong, General Manager of the Baotou Steel Rare-Earth Hi-Tech Co, China’s leading rare earth producer, stated that the tax for mined light rare earths is to be 60 yuan ($9.15) per ton, while that of medium and heavy rare earths is to be 30 yuan ($4.6).
China currently lists rare earth minerals under the category of ordinary non-ferrous metals, whose tax rates are between 0.5 ($0.08) and 3 yuan ($0.46) per ton.
Baotou Steel Rare-Earth Hi-Tech Co, headquartered in northern China, is currently the world’s biggest producer of rare earth magnets. Zhang Zhong said the tax will increase the company’s production costs by about 720 million yuan (US$109.7 million) this year.
Neodymium prices double
Zhong continued by stating that prices of rare earths have been soaring since February (2011), sometimes by 10,000 yuan per ton a day. The price of neodymium, a rare earth mineral used for making rare-earth magnets, increased to 600,000 yuan ($91,415) per ton this week (wb 21/3/11) from 300,000 yuan ($45,707) per ton at the end of 2010.
The tax is part of a series of new measures unveiled by the Chinese authorities affecting the industry. The Ministry of Environmental Protection announced earlier this month that tougher rules on emission limits for producing rare earths will take effect in October 2011.
As reported last month on ipmd.net (see here), China has already cut export quotas for rare earth minerals this year, causing concern for many industries. The shortages have resulted in new searches for rare earth mineral deposits in other regions of the world.