Origins — China and East Asia
The origin that is also the destination.
For most of our book this is where cargo goes. For a short list of critical minerals it is where cargo comes from, and export licensing decides whether it moves at all.
- World rare earth separation
- Roughly 90%
- World tungsten supply
- Around 80%
- Coal production
- Largest on earth
- Controlled minerals
- Licensed per shipment
Overview
Supply, demand, and a licensing regime.
China is the destination for most of what we ship — iron ore, coal, bauxite, nickel, copper concentrate — and treating it only as demand misses the other half. For a specific and strategically chosen set of minerals it is also the origin, and increasingly a controlled one.
Bayan Obo supplies the light rare earths and the ion-adsorption clays of the south supply the heavies. Separation capacity, which is the actual bottleneck rather than the ore, is close to nine tenths Chinese, so even non-Chinese concentrate usually passes through China before it becomes a separated oxide.
Since 2023 export licensing has been used deliberately as an instrument. Gallium and germanium, graphite, antimony and rare earth processing technology have each been brought under control. These are not bans — they are licence requirements, which means supply remains available but conditional, and the condition is political rather than commercial.
Japan and Korea mine almost nothing and matter enormously. Korea Zinc's Onsan is the largest zinc smelter in the world, and the Japanese copper smelters are where a large share of Andean and Indonesian concentrate is contracted. On this page they are the buyers, and their treatment charge negotiations set terms for the whole market.
Minerals desk
Rare earths, and the separation bottleneck.
Two geologies doing two jobs. Bayan Obo is a bastnäsite and monazite deposit mined alongside iron ore that supplies the light rare earths — neodymium and praseodymium for magnets. The ion-adsorption clays of Jiangxi, Guangdong and Fujian supply the heavies, dysprosium and terbium, that keep those magnets working at temperature.
Supply is administered rather than marketed. Mining and separation quotas are issued annually to a consolidated group of state-linked producers, which is a control mechanism with no equivalent anywhere in Western mining. Output is a policy decision before it is a price response.
The bottleneck is separation, not extraction, and it is being defended. Export controls now extend to the processing technology itself, which is aimed squarely at preventing the capability from being replicated elsewhere. Any Western rare earth project's real question is not where the ore is but who will separate it.
Minerals desk →| Source | Product | Location and note |
|---|---|---|
| Bayan Obo | Light rare earths with iron ore | Inner Mongolia — the largest rare earth deposit in the world |
| Ganzhou and southern clays | Heavy rare earths — Dy, Tb, Y | Jiangxi, Guangdong, Fujian — ion-adsorption clays, the global heavy REE source |
| Maoniuping | Bastnäsite, light rare earths | Sichuan |
| Separation capacity | Roughly 90% of world | Consolidated state groups operating under annual quota |
Minerals desk
Tungsten, antimony, graphite and gallium.
These four sit together because they share a structure: China holds a dominant share of supply, and each has been brought under export licensing since 2023. The commercial consequence is that lead time replaced price as the binding variable — material is obtainable, but on a timetable set by a licensing authority.
Tungsten at roughly four fifths of world supply out of Jiangxi and Hunan, antimony concentrated at Xikuangshan in Hunan, and flake graphite from Heilongjiang. Gallium and germanium are not mined at all — they are recovered as by-products of alumina and zinc refining, which is why capacity sits wherever the refining does.
A buyer needs an end-use declaration and a licence granted shipment by shipment. That is a materially different procurement problem from anything else in our book, and it is the reason substitution and thrifting programmes have accelerated across the affected industries.
Minerals desk →| Material | Form | Position |
|---|---|---|
| Jiangxi and Hunan tungsten | APT and concentrate | Around 80% of world supply |
| Xikuangshan | Antimony | Hunan — the dominant global source, under export control since 2024 |
| Heilongjiang flake graphite | Natural flake and spherical | Luobei and Jixi — under export licensing since late 2023 |
| Gallium and germanium | Refinery by-products | Recovered from alumina and zinc refining — under export control since 2023 |
| Fluorspar and magnesium | Industrial minerals | Dominant supply positions with less formal control |
Energy desk
The enormous domestic book.
China produces more coal than the rest of the world combined and exports almost none of it. What matters to us is the import volume, because the gap between domestic output and demand is the swing that sets the Indonesian and Australian seaborne markets. A good year in Shanxi is a bad year in Kalimantan.
The same is true of gold. China is the largest gold producer in the world and the metal does not leave. It is a demand story dressed as a supply one.
Lithium is the interesting exception. Jiangxi lepidolite is high-cost, marginal material that sets the floor when prices crash — when the price falls far enough that lepidolite converters stop, the market has found its bottom. Watching that cost curve is more useful than watching most published forecasts.
Energy desk →| Region | Product | Note |
|---|---|---|
| Shanxi, Ordos and Shaanxi | Thermal and coking coal | The largest coal production on earth, almost entirely domestic |
| Jiaodong Peninsula | Gold | Shandong — the largest gold producing region of the largest producer |
| Yichun | Lithium from lepidolite | Jiangxi — the high-cost marginal tonne that sets the price floor |
| Jiajika and Sichuan spodumene | Hard rock lithium | Sichuan — domestic hard rock supply |
| Chaerhan and Zabuye | Lithium brine | Qinghai and Tibet — high magnesium ratios, difficult processing |
| Jiama, Yulong and Dexing | Copper | Tibet and Jiangxi — meaningful, and nowhere near enough |
Metals desk
Mongolia, and where the concentrate is contracted.
Oyu Tolgoi is one of the largest copper developments in the world, moving from open pit to block cave, and it sells into China because geography leaves no alternative. Tavan Tolgoi coking coal does the same. Mongolia is a supplier with exactly one customer, and every commercial term reflects that.
The East Asian smelters are the other half of this page and arguably the more important half for the metals desk. Chinese, Japanese and Korean smelters set the treatment and refining charge benchmark for the world, and when their capacity runs ahead of concentrate supply, TC/RCs collapse and value shifts from smelter to miner.
That annual benchmark negotiation is the single most consequential event in the concentrate calendar. Anyone trading copper concentrate who is not tracking Chinese smelter utilisation is pricing off the wrong variable.
Metals desk →| Asset | Product | Owner and role |
|---|---|---|
| Oyu Tolgoi | Copper-gold | Rio Tinto and Erdenes, Mongolia — block cave ramp-up |
| Tavan Tolgoi | Coking coal | Mongolia — trucked and railed south into China |
| Erdenet | Copper concentrate | Mongolia — long-established, state-linked |
| Onsan | Zinc, lead, silver, indium | Korea Zinc — the largest zinc smelter in the world |
| Toyo, Saganoseki, Onahama | Copper smelting | Japan — long-term concentrate offtake counterparties |
| Chinese smelter complex | Copper, zinc, nickel | Sets the TC/RC benchmark the whole concentrate market prices against |
Regulation
What governs both directions of the trade.
This is the only origin on the site where we are as often the seller as the buyer. These terms apply to cargo arriving as much as to material leaving.
- 01Export licensing on controlled minerals
- Gallium, germanium, graphite, antimony and rare earth processing technology require export licences with end-use declarations, granted shipment by shipment. Lead time rather than price is the binding constraint, and licence status is confirmed before anything is contracted.
- 02Rare earth quotas
- Mining and separation volumes are set by annual quota issued to consolidated state groups. This is an administered market, and supply responds to policy before it responds to price.
- 03Import inspection
- Customs inspection covers specification and radiation on bulk imports, with real rejection risk. The inspection standard, the resampling procedure and who bears a rejection are agreed in the contract rather than argued at the berth.
- 04Destination and origin policy
- Informal import restrictions have been applied to specific origins in the past, without published rules or notice. Destination risk is genuine and a cargo committed to a single discharge port with no alternative is a position, not a plan.
- 05TC/RC benchmark negotiation
- The annual settlement between the East Asian smelters and the major miners sets treatment and refining charges for the entire concentrate market. Everything the metals desk buys in concentrate is priced off the outcome of a negotiation we do not sit in.
- 06Documentary compliance
- Letters of credit issued by Chinese banks are examined strictly, and a discrepancy that would pass elsewhere will be rejected here. Documents are prepared to match the credit exactly, and the credit is reviewed before shipment rather than at presentation.
Execution
Discharge, inspection and documents.
- Discharge at Qingdao, Rizhao, Caofeidian, Bayuquan and Fangchenggang, with port stock levels checked before a cargo is committed
- Customs inspection on arrival covering specification and radiation, with the rejection and resampling procedure written into the contract
- Bonded and port-stock financing arranged for material held pending sale, rather than forcing a sale on arrival
- Export licence status confirmed in writing before contracting anything subject to Chinese export control
- Documentary presentation prepared to match the letter of credit exactly, with the credit reviewed before the vessel sails
- Ore and concentrate blended at port to a buyer's specification where the contract permits it
Origination
Smelters, refiners and licence holders across China, Japan, Korea and Mongolia can reach the metals and minerals desks directly.