Strategic Rare Earths Alliance Signed between Chinalco and France’s Rhodia

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Despite erratic global supply and skyrocket prices, French chemicals company Rhodia had entered into a strategic alliance with China Rare Metals and Rare Earth Co. Ltd. (Chinalco) where both companies will develop opportunities in the rare earth metals business.

The two companies will work towards developing a cooperation in rare earth supply, technology and market development by using both parties' competitive advantages in the value chain.

China Rare Metals and Rare Earth Co. Ltd., one of China's many rare earths producers, is the wholly-owned subsidiary of Chinalco.

Rhodia Rare Earth Systems is a global business unit of the Belgian group Solvay SA that is involved in rare earth-based specialty chemicals. It supports the automotive, lighting and electronics industries in their search for sustainable solutions. It is one of two European producers, the other being Estonian firm Silmet, that is part of the US Molycorp group.

Global consumers and manufacturers dependent on rare earth metals for their products better have been advised to brace for a further supply crunch as China , the world's foremost supplier of the precious minerals, will cut down overall production output to just about 70 per cent by 2015.

International metals and minerals research firm Roskill, in its latest report, " Rare Earth s & Yttrium: Market outlook to 2015, 14th edition 2011," had said much of China's total output would go to Chinese manufacturers to address the demands of domestic industy, leaving only a small amount for export.

At least seven manufacturing industries, including automotive, chemicals, aviation and renewable energy, are likely to face a shortage of raw materials and a slump in industrial activities, as 14 REM may turn even more insufficient in the next five years, according to PricewaterhouseCoopers LLP.

Global manufacturers may be seriously affected by a critical shortage of raw materials which could disrupt entire supply chains and economies, PwC had said.

REM Beryllium, Cobalt and Flurospar have been forecast to become fewer in the next few years. Beryllium is used as a lightweight component in military equipment, while cobalt is used in industrial manufacturing. Lithium is for wind turbines and hybrid cars.

Tantalum and flurospar will also face a shortfall, PwC added.

Read more:

Shortage of Rare Earths a Crisis Waiting to Explode

China Cutting Rare Earth Production to 70% by 2015: Study

South Korea Pushes to Acquire 30% More of South African Rare Earths Mine

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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