Rare earths still plentiful despite crackdown on smuggling operations

Chinese authorities are struggling to break up an illegal supply chain for rare earth metals, 40,000 tons of which were smuggled out of the country last year, Reuters reported, citing industry estimates. The smuggled minerals, which far exceed the 28,000 tons of officially recorded exports, are squeezing overseas producers like America’s Molycorp and Australia’s Lynas Corp, whose business plans were built on China’s efforts to crack down on illegal production and restrict domestic supply. Many hoped removing quotas and tariffs this year would end arbitrage opportunities, but with Beijing imposing production caps and many miners operating well below full capacity, the incentive to produce remains.