Over the weekend we saw a number of articles make reference to a China Daily article titled “Smuggling blights rare earth industry“, whose authors report that a “senior official from the General Administration of Customs” has said that the smuggling of rare earths outside of China continues to increase.
The authors go on to refer to the white paper on rare earths issued by the Chinese government in June 2012, claiming that the report said that “the amount of rare earths smuggled out of China was 20 percent higher than the amount of products that legally left the country,“ and that this equates to more than 21,000 tonnes of smuggled rare earths. Coupled with the 18,600 tonnes of rare earths exported through official channels, this would imply total exports of 39,400 t of rare earths from China in 2011.
Unfortunately, the arithmetic above does not match the numbers to be found in the aforementioned white paper – at least not in the English-language version of it.
The white paper specifically says that:
“From 2006 to 2008, the volumes of rare earth products imported from China, according to statistics collected by from foreign customs, were 35 percent, 59 percent and 36 percent higher than the volumes exported, as statistics released by the Chinese customs show, and the figure from foreign customs is 1.2-fold over the Chinese figure in 2011.”
One can easily determine that the term “1.2-fold” refers to the foreign customs figures being 1.2 times the figures recorded by the Chinese authorities in 2011 (i.e. 120% of them), because this would put the value in the same order of magnitude as the numbers stated for previous years. More important, 2011 was the year in which rare-earth prices peaked, and in which end users made successful efforts to reduce or to eliminate light rare-earth usage from their supply chains as a result. In “normal” years, lanthanum and cerium oxides typically constitute 60%-80% of all rare-earth exports by mass; it has been well-documented that catalyst manufacturers and users of glass-polishing compounds (two of the most significant applications for these two rare earths) significantly reduced usage in 2011.
It is therefore self-evident that there couldn’t possibly have been a non-Chinese market for almost 40,000 tonnes of rare earths in 2011. The discrepancy between Chinese rare-earth export figures and the rare-earth import figures from foreign governments that were cited in the white paper, is therefore around 20%, or 3,720 tonnes of shipments sent via non-official channels, not the more than 21,000 tonnes that the China Daily article would have us believe.
Is this a simple misunderstanding of the numbers, or something more deliberate? I leave that for the reader to decide. Whatever the reason for the discrepancy, it illustrates the problem of uninformed commentators (in the rare-earth sector and elsewhere) simply regurgitating such information, without doing even the simplest of fact checking.
There is also the growing issue of certain commentators coyly playing the role of “mouthpiece” for the Chinese government on related topics, but that’s a story for another day.
