The Fanya Metal Exchange
The Impact of Conflict Minerals Legislation in Rwanda

The magazine of the Minor Metals Trade Association

3rd Edition 2014 July

www.mmta.co.uk

2

LETTER FROM THE MMTA BOARD OF DIRECTORSTHE FANYA METAL EXCHANGE MEMBERSHIP APPLICATIONMMTA Members will be aware from trade news services that The Fanya Metal
Exchange Co. Ltd ("Fanya") has applied for MMTA membership. The MMTA
Directors are considering this application.
The first hurdle when the application was received was that very little was
known about Fanya here in Europe and so the MMTA Directors were delighted
that Fanya accepted their invitation to make a presentation at the MMTA’s
International Minor Metals Conference in London on 29 April 2014.

INSIDE THIS ISSUE
Letter from the MMTA Directors………..3
Fanya Metal Exchange Application…….4
Hard Assets Investor on Fanya..………...12
MMTA’s 41st Anniversary Dinner………..13
Minor Metals in Make-Up…………………….15
REACH Course………………………...…...…....….16

The Fanya presentation took place in a very well attended session and thequestions from the floor that followed made the session one of the mostinformative and interesting for many years. For those of you who have notalready seen it, with the kind permission of Hard Assets Investor, we replicate
Tom Vulcan's article published shortly after the conference - see page 12.

Minor Metals in Medical Applications.16

Scarlett Zhang of Fanya gave a detailed presentation and made a very good
attempt to answer the numerous questions from the floor. Time constraints,
and the fact that the presentation was in English, made the task harder.
Although the session overran its time allocation, it was clear at the end thatquestions from many Members and delegates either remained unansweredor further information was required.

New EU Critical Raw Materials List..….19

Greenland-EU Raw Materials………....….17
CRM Innovation Network Report….…..18
This Week in Rare Earths………………...….19
Key Aspects of REACH Compliance..20
MMTA Conference & Events……………..23
Rwandan Mining Sector/Impact of
Dodd Frank…………………………………………...24

Therefore, after the conference, the MMTA Directors formally wrote to Fanya
seeking their response to a list of questions so as to better understand theirbusiness and to enable the MMTA Directors to consider how Fanya would
potentially fit within the MMTA. Fanya have provided very full and detailed
written answers to those questions. With Fanya's kind permission we
replicate the questions in the MMTA letter and the Fanya answers at page 4 to
11 - the only editing has been to merge the list of questions and Fanya's
answers which are displayed in a blue font.
While there are clearly a number of issues of interest to Members, the MMTA
Directors have focussed on one particular issue: from Fanya's presentation,and the detailed Fanya answers overleaf, it is clear that a significant
proportion of the Fanya business is the sale of metal to individuals who are
private individual investors.
In contrast, the MMTA was established to assist and encourage the trading ofminor metals by businesses. The MMTA Directors’ understanding of the
MMTA is that it is a business to business ("B2B") organisation. The MMTA
Directors are not aware of any existing Member for which minor metals
transactions with private individuals represents a significant part of theirbusiness.
The MMTA Membership Rules specifically exclude private individuals frommembership. Under those rules, MMTA Members must be involved, "with the
production, physical trade or consumption of minor metals and services
related thereto".
The MMTA Directors wish to give members the opportunity of confirming
whether this understanding of the function and scope of the MMTA is also
shared by the Membership. This will then allow the MMTA Directors to givefurther consideration to the Fanya membership application.

The MMTA promotes
essential elements thatadd quality, safety andenjoyment to our lives.
The MMTA is the world's
leading minor metals
industry organisation.

Therefore the MMTA Membership will be asked whether they consider thatmembership should be restricted to the B2B environment as historicallyunderstood or alternatively whether it should be extended to accommodate
Companies that make or facilitate retail sales of metal to private investors.

3THE FANYA METAL EXCHANGE MEMBERSHIP APPLICATION CONT’D….
Guidance On Voting
1. All Members will be balloted on this specific issue by email with one vote per Member.
2. Service members who have no direct industry involvement in that they do not buy, sell or trade minor metal
are encouraged to abstain from voting.
3. Votes cast by email to the MMTA General Manager, Maria Cox, are to be received no later than 17.00 hours
London time on 11 July 2014
4. If no vote is received from a Member, it will be deemed that the Member has abstained from voting.
5. Abstentions will be treated as a non vote and the outcome will be determined on a majority basis.

MMTA QUESTIONS AND FANYA’S RESPONSES:
1. Exactly who owns and/or controls Fanya Exchange?

The Fanya Metal Exchange Co. Ltd.’s shareholders are composed by legal persons and natural persons. The
single biggest share takes 34%. The law person of Fanya Mr. Shan Jiuliang is Chairman of Board and President of
the Fanya Metal Exchange.
2. Exactly how is Fanya regulated?
a. Detail the relevant Chinese law/statute/legal references


Yunan Province Trading Place Supervision Regulations (Provisional)

The State Council Decision on Rectification of all the Exchanges to Guard against Financial Risks(Issued by State Council [2011] 38th Notice)The State Council Implementing Opinions of Rectification of all the Exchanges (Issued by StateCouncil [2012] 37h Notice)Yunnan Provincial Government General Office Printing Notice of Rectification of all the Exchanges(Issued by Kunming Government [2011] 256th Notice )

The Fanya Metal Exchange Trading Place Supervision Management Regulations (Issued by Kunming
Government [2010] 110th Notice)b. Exactly which Chinese body/agency acts as regulator?


The Fanya Metal Exchange was registered at Bureau of Kunming Administration for Industry andCommerce and supervised by Yunnan provincial government and Kunming government. The
business is supervised by China's Securities Regulatory Commission, People's Bank of China, China
Banking Regulatory Commission, Chinese Ministry of Commerce, the National Development andReform Commission.

c. What are the primary objectives of such regulation?


Mainly regulate, monitor, and guide the activities of the exchange, trading participants and all the
trading activities on the platform.



Government monitor and administrate the exchange by the following procedure.
 Government puts on file in advance, audits the establishment terms, significant operating

and management business, trading rules, risk control rules and inspects the executions
situation periodically and occasionally.

 The Exchange sets perfect administration and management system to supervise andmanage the platform trading and companies’ operation in accordance with national relevantlaws, regulations and rules.

Yunnan provincial Financial Office supervises the daily work of the Exchange.
d. What elements of Member protection are built into the exchange rules to protect private
investors?

4



Kunming Fanya Metal Exchange Spot Trading Management regulations (Provisional)Kunming Fanya Metal Exchange Metal Delivery Management rules (Provisional)

Kunming Fanya Metal Exchange Risk Management Regulations (Provisional)Kunming Fanya Metal Exchange Fund Settlement Management Rules (Provisional)Kunming Fanya Metal Exchange Provisions of Risk Reserve Management Regulations (Provisional)Kunming Fanya Metal Exchange Emergency Management Measures （Provisional）

Kunming Fanya Metal Exchange Spot Trading of Entrusted and Be Entrusted Business Management
Rules (Provisional)

Fanya Metal Exchange Transaction disputation Handling Measures (Provisional)

Fanya Metal Exchange Information Announcement Management Rules (Provisional)

Fanya Metal Exchange Spot Transaction Safety Guarantee Measures (Provisional)e. Are Members that are private investors informed of all the possible risks of investing in thevolatile and illiquid minor metals market?
Yes. Before Members participate platform transaction and sign Protocol, they should know well of
Exchange’s business. Meanwhile, the Exchange also tells relevant possible risks in the form of Risk
Disclosure Statement in the Protocol. Members must read and comprehensive the Statement andthen can they take signature before open accounts at the Exchange.

Spot transactions and the entrust (entrusted) business in the Exchange have certain risk, and you
may get a relatively higher income ,or suffer bigger losses, so these transactions are not suitable forpensions, private debts and bank loans. The clients should carefully read the "The disclosureStatement ", must ensure that the clients understand the Exchange’s essence, transaction rules, anddecide themself whether to participate the transaction on the basis of their own experience,
objectives, financial situation, the ability to take risks before they sign accessing market Protocol andopening account.

The possible risks include but not limited to the policy risks, price fluctuation risk, the technical risk,
the transaction risk, force majeure. The clients shall carefully assess the risks involved in thetransaction, remember that "market has risk, the investment need to be cautious," and take thetransaction rational, scientific in non-ferrous metal spot trading.

f. Who are the legal contract parties? Do Members contract with Fanya or do sellers and buyers
contract directly with each other?


Members of the Exchange are the legal contract parties. After signing Protocol with the Exchange,
they open a Member account. Through the account on the Fanya electronic platform, they dotransaction with other members. Both parties sign electronic contracts and do transactions only
between the members.

g. Can Members always buy and sell at quoted prices? Is there an obligation to deal/transact at
the quoted price?


For the normal condition, the parties of buyer and seller make bids freely and make deal at a same
quotation. Under special cases, in order to control transaction risk, risky member may be mandatory
to clinches a deal at market price. If the risky members within the given time to make up the funds,
this kind of member will not be forced to clinch a deal.

h. How are the activities of Members regulated? For example what safeguards are there forMembers to ensure that related parties are not either manipulating quoted prices or "front
running" markets?
The Exchange forbids any manipulating prices and other unfair activities, and restrict any
phenomenon which destroys fair trading by regulations and rules. For example, Fanya is the uniqueexchange by real-name registration system through which any Member can see other Member’squotation and deals, therefore, price manipulation can be forbidden effectively. The rule of making
full payment or delivering all goods forbids the deal by contract, which can restrict speculation
effectively and forbid price manipulating.

3. Who are the Fanya Members?

The Members are classified into producers, wholesalers and traders.
a. Fanya has 70,000 Members and states that 500 new Members are being added every day, but
no Members’ directory appears to be available. Can the Members’ Directory be made available
to the MMTA?

5FANYA METAL EXCHANGE MEMBERSHIP APPLICATION CONT’D…..


By the end of May 20, 2014, the number of Members has reached 100,000 and 500 new members
added every day. The total number can be published without name and information, but the list ofMembers are their confidentiality. It is obligation to maintain confidentiality for all the Members. It is
not suitable to disclose to MMTA.

b. When it comes to Members holding Fanya metal stocks, what is the percentage ratio of metalcompanies (producers, traders and consumers) to investors (institutional and private)?


On Fanya platform, private enjoys the same right as companies and institutes. All the private
members can hold Fanya registration receipts. The platform does not classify the holding ration of
warehouse receipts.

c. What proportion of the stocks by value held at Fanya warehouses are owned by Members whoare private investorsAll the privates, companies and institutes are equal participants of exchange. The platform does notclassify the holding ration of stocks by private, company or institute.

d. What proportion of transactions by value are made by Members who are private investorsAll the participants have the same right of trading on platform, so we don’t classify the proportion oftransaction of one commodity on the platform by private, company or institute every day.

4. Please detail Fanya defined metal contracts for each metal listed, the registered brands deliverable,
contract sizes and deliver terms etc that can be traded on the exchange.

To know all the information of listed commodities, please log in the official website www.fyme.cn. All the data
shall be updated every Friday and stamped confirmed by the 3rd-party warehouse & logistics. All the stock
information can be obtained by click “stock information” to know details of number of registration receipts,
brands, sizes, destination and trading parameter. The website is http://www.fyme.cn/a/shangshipinzhong. All
the exchange is spot trading, which means that all the metals can be delivered when buyers place member andreceive the delivery bill, so the delivery terms is one day or the very day.
5. Who are the 3rd party contractors?

The 3rd party contractors include designated warehouse, designated quality inspecting institutes, professional
insurance companies and designated settlement banks.
a. Who are the 3rd parties involved in Fanya's warehousing, inspection & analysis of metal, insuranceetc?

Commodity

Designated Warehouse

SilverShanghai Feiping Logistics Co., Ltd
Yunnan Company of SinotransShanghai Feiping Logistics Co., Ltd

IndiumKunming Warehouse of Shanghai Feiping Logistics Co., Ltd
Yunnan Xinchu Logistics (Kunming) Co., Ltd
Shanghai Warehouse of Shanghai Feiping Logistics Co., Ltd

Germanium

Yunnan Company of SinotransShanghai Feiping Logistics Co., Ltd

CobaltAPT

Wuxi Stainless Steel Electronic Exchange Center CO,, Ltd
Ganzhou Warehouse of Shanghai Feiping Logistics Co., Ltd
Hunan Bismuth Industry Co., Ltd

BismuthGallium

6

Guixi Warehouse of Shanghai Feiping Logistics Co., Ltd
Tianjin Warehouse of Shanghai Feiping Logistics Co., Ltd

Commodity Cont’dDesignated Warehouse Cont’d

Vanadium Pentoxide

Sichuan Province Logistics Industry Co., Ltd.

Yunnan Company of Sinotrans

China Antimony Corporation

Antimony
State Reserve Logistics Co., Ltd. Guanxi

Qingyuan Warehouse of China Logistics Co.,Ltd.

Tellurium

Guixi Warehouse of Shanghai Feiping Logistics Co.,Ltd.

LEGAL ASPECTS OF
CONTRACTING COURSE
Many thanks to Penningtons
Manches LLP for delivering an
extremely useful overview ofthe different aspects of thecontracting process when
involved in international trade.
Those present had lots ofquestions for our expert
speakers.

TECHNOLOGY &APPLICATIONS OF MINOR

Qingyuan Warehouse of China Logistics Co.,ltd.

Selenium
Changsha Warehouse of China Logistics Co.,Lt

Listed Commodity

Name of Quality Inspection InstituteSino-platinum Metals Co Ltd

IndiumKunming Metallurgical Research Institute

Tungsten Bar

National Tungsten & Rare Earth Products Quality Inspection
CenterAPT

National Tungsten & Rare Earth Products Quality Inspection
Center

Gallium

Evans Analytical Group

BismuthHunan Company of China Certification & Inspection (Group)
Co Ltd (CCIC)
Kunming Metallurgical Research Institute

Vanadium Pentoxide

Sichuan Metallurgical Products Quality Inspection Center

METALS COURSEIn the morning, the course
covered an overview of thebasics of metallurgy, withspecific references to theproperties and uses of minor
metals, especially in the alloying
process. This was followed
after lunch by an overview ofsome of the key applications forminor metals, focussing on what
they add to the specificapplication and why. Thank you
to the Advanced Manufacturing
Research Centre for delivering
this course for us.

INFORMAL DRINKS,NEW YORK

Kunming Metallurgical Research Center

Antimony

Tellurium

Guangxi Metallurgical Products Quality Inspection Center
Analytical & Testing Centre of Guangzhou Research Institute of
Non-Ferrous Metals
Kunming Metallurgical Research Center

Selenium

Analytical & Testing Centre of Guangzhou Research Institute of
Non-Ferrous Metals

It was fantastic to see so many
MMTA Members, as well as
new faces at the informal drinks
recently. Thank you, too, toMetal Pages for donating
sponsorship to help keep thedrinks flowing!

Hunan Company of CCIC

7

THE FANYA METAL EXCHANGE MEMBERSHIP APPLICATION CONT’D….
b. What rules must these 3rd parties comply with in carrying out their roles?


The 3rd parties must comply with the following rules as well as the national laws and policies andrules issued by Chinese government.

Kunming Fanya Metal Exchange Spot Trading Management regulations (Provisional)Kunming Fanya Metal Exchange Metal Delivery Management Rules (Provisional)Kunming Fanya Metal Exchange Risk Management Regulations (Provisional)Kunming Fanya Metal Exchange Fund Settlement Management Rules (Provisional)Kunming Fanya Metal Exchange Provisions of Risk Reserve Management Regulations (Provisional)Kunming Fanya Metal Exchange Emergency Management Measures （Provisional）

Kunming Fanya Metal Exchange Spot Trading of Entrusted and Be Entrusted Business Management
Rules (Provisional)

Fanya Metal Exchange Transaction Disputation Settlement System (Provisional)

Fanya Metal Exchange Information Announcement Management Rules (Provisional)

Fanya Metal Exchange Spot Transaction Security Pledge Measures (Provisional)All above are the relevant regulations and rules for the third parties.

c. Are these 3rd parties independently monitored to ensure that such rules are complied with?


On the one hand, as a public platform, all the participants monitor the third parties, On the other
hand, local government and Chinese government supervise and monitor the third parties. Lastly,
Fanya supervises these third parties according to the relevant management systems.

d. In the presentation Fanya stated that 20 Chinese banks were involved. Who are theyfinancing, Fanya or Members?
e. What is the structure of this financing? What are the advance rates loan value to metal value?
Another three banks joined the Fanya’s business recently, so the total cooperation banks are 15 by
now. These banks don’t make financing cooperation with Fanya but supply account settlement anddeposit management. Bank financing business is under development, and there are no problems offinancing structure and the advance rates now.

6. How does Fanya ensure the quality of metal delivered to the exchange?

The Fanya Metal Exchange ensure the safety and quality of the metal by the following five procedures,
Five commodity safety protection system = producers’ system + wholesalers’ system + the 3rd parties quality
inspection institution + whole process insurance by insurance company.
1） Producers’ system
Producers would be wholly responsible for the products quality and weight, what they supply to Fanya,
and its responsibility cannot finish with the transformation of the ownership of the products inwarehouse.
2）Wholesalers’ system
Wholesalers’ system ensures that the products in our stocks are the brand of producers and also ensurethat the quality and weight are all complied with our commodities trading rules.
3）The 3rd party professional storage and logistics service, which ensures the safety of commodity.
We employ the independent 3rd party warehousing company to supply the service of stocking andlogistics for our membership.
4）The 3rd quality inspection institution to ensure the quality of commodity.
Every commodity must be strictly inspected by the 3rd party authorized quality inspection institution for
ensuring the quality of commodity.
5）Commodity insurance company
To minimize the risk of every commodity in the stocks, we make insurance for every commodity at its
full amount.

8

Stock of Indium in Kunming
Warehouse of Shanghai
Feiping Logistics Co.,Ltd andYunnan Xinchu Logistics(Kunming) Co., Ltd

Indium and Germanium in
Kunming Warehouse of
Shanghai Feiping Logistics
Co.,Ltd. and Yunnan Xinchu
Logistics (Kunming) Co., Ltd

Vanadium Pentoxide in
Sichuan Province Logistics
Industry Co., Ltd.
Bismuth in warehouse of
Hunan Bismuth Industry
Co., LtdInternal package of Indium
is by plastic film. Every
ingot printed with metalname, production date,
production batch number,and brand.

a. Fanya has a list of approved ‘brands’ for each metal that can be sold on the exchange. Can the
MMTA receive a list of those suppliers that are approved for each commodity and what are thecriteria for brand approval?
You may check the relevant listed products information, such as brand, specification, delivery,
trading referential data and suppliers testifying information by logging on the Fanya Metal
Exchange’s official website http://www.fyme.cn/a/shangshipinzhong/.

The supplier who get approved brand should offer full document profiles including administration,
taxes, environment certificate, Safe Production Certificate, Brand Registration Certificate, company
profiles, financial performance introduction, brand influence and credit etc. We give priority to thebrand that is in good reputation and outstanding brand in the rare metal industry.

9THE FANYA METAL EXCHANGE
MEMBERSHIP APPLICATION
CONT’D….

CCTV monitoring of metals in warehouse.

b. How closely does Fanya monitor the quality of the metal delivered? At least one of thebrands listed on Fanya refers to a trading company rather than a producer, which raises
concerns regarding how quality consistency is monitored.
Every batch of metal must be sampled inspected by the 3rd quality inspection institutes who arerecognized by market. All the producers shall be responsible for the brand metals’ quality fromdelivery to warehouse to consumption in the end-users. Trading companies are not responsible forthe quality and they only sell goods on Fanya platform. The Exchange invite different quality
inspection institutes periodically to inspect the metals at the same time in order to secure thequality of all the metals in warehouse.

c. Is material sampled by 3rd party experts using representative sampling techniques when it isdelivered to Fanya and what are the minimum quality requirements for each metal?
Yes. The sample metal requires representative sampling techniques. The sampled metal shouldreach the quality standard of regulations of commodity exchange before they are delivered towarehouse. The lowest standard takes GB standard or Industry standard as a reference. Most
standard is higher than the quality of GB or Industry Standard.

Above: Spot sampling of indium delivered into warehouse
before registering Right: Analysis result of chemical elements
for Indium delivered from Guangxi Debang Technology Co.,Ltd.

Left & Centre: Quality Inspection report of Indium supplied by Guangxi Debang Technology Co.,Ltd. Right: Quality Inspection report ofthe second sampling inspection of Indium in warehouse (Twice for one year)
b. Why is there a need to re-cast Indium metal before it is delivered to the exchange? Is this thesame for other metals?

Not all the Indium should be re-casted. The brand approved by the Exchange can be delivered into thewarehouse if the Indium has passed sampling inspection. The brand which is not approved by theexchange need to be re-casted. All the other metals take the same procedures as Indium.

10

c. What is the procedure if a Member has a claim on quality or non-delivery?

Quality claim or non-delivery violate must be treated in accordance with the rule of “Kunming Fanya
Metal Exchange Metal Delivery Management Rules (Provisional)”。 Please click the link for reference,and find the Part Nine treatment of delivery violation.
http://www.fyme.cn/a/xiangguanjieshao/jiaoyiguize/2013/0917/18543.html
Storage information: http://www.fyme.cn/
Designated delivery warehouse details: http://www.fyme.cn/a/settlement/settlement_warehouse/
3rd quality inspection institutes details: http://www.fyme.cn/a/news/public_notice/settlement_pulic/2011/0420/212.html
Insurance companies details: http://www.fyme.cn/plus/list.php?tid=300
Delivery public notice : http://www.fyme.cn/a/news/public_notice/settlement_pulic
7. How does metal leave the exchange?

After the Member place order, the exchange will issue delivery bill for him and the Member can take delivery
from warehouse by himself or get metal from the Member’s designated destination where the logistics
company deliver the metal. It usually spend only one day for Member to take delivery.
a. Please explain how a Member who buys metal on the exchange can take physical delivery of
the metal from Fanya?

The steps can be simplified as below：
1）Sign a Protocol to be a Member of Fanya and open an account automatically formed by Fanya’ssystem. The account is banded with the member’s bank account in order to help transfer money
between the exchange and its Bank account.
2）Deposit money to the exchange account;3）Log in exchange system and buy metal.
4）Buyer get products (registered receipts) and transfer the payment to seller’s account;5）Buyer (who holding the registered receipts), make an application of delivery to the Exchange
6）The Exchange send the notice to issue a delivery bill for the buyer7）Buyer take the delivery of metal according to the delivery bill.
b. When a Member buys metal on the exchange what ownership documentation do they receive?
Are buyers issued with warehouse warrants conforming to defined Fanya metal contracts
referring to actual stock/identified parcels of metal? Can these warehouse warrants becancelled and the metal physically collected by the buyer?


Buyers get ownership documentation (we call it registration receipt) when they buy metal from the
Exchange. The registration receipt shows the metal name, quantities and the current status. The
registration receipt is the correspondent with the metal in warehouse, and the buyer can see themetal and confirm package. The registration receipt is a proof of ownership and it cannot becancelled before it is transferred to other buyers or delivery. Buyers can make application of delivery
and get the metal. Many buyers (companies and privates) have taken delivery from the warehouse.

c. When a buyer takes physical delivery of metal, what documentation does he get proving theprovenance and quality of the material?
When buyers take delivery, he will receive the invoice from buyer as well as the certificate of quality
with supplier’s name and trademark, metal name and brand, production batch number, net weightand pieces, chemical analysis of test result stamped by quality supervising bureau, standard codeand date of production included.

d. What proportion of buyers take physical delivery of metal?


There is no data for the moment.

e. Does Fanya regulate the lot sizes and load in/load out rates?
Please see the regulations of every listed metals by the link website. http://www.fyme.cn/a/shangshipinzhong/f. What is the lead time for delivery?


Buyers and sellers make the contract via Fanya platform and then the platform can make thesettlement during the transaction period. Buyers can submit the delivery application via platformsystem the very day and finish the delivery next day.

11

CHINESE EXCHANGE FANYA STRIVES TO OPEN DOOR TO MINOR METALS INVESTINGFirst Published in Hard Assets Investor

Stocks of stored minor metals such as indium growing, but what are the pitfalls?
Scarlett Zhang, vice president of the China-based Fanya Metal Exchange, told the attendees at the Minor Metals
Trade Association's 2014 International Minor Metals Conference in London at the end of April that 2,500 (metric)
tons of minor metal indium is in stock.
She also informed the conference that figures for other minor metals held in the exchange's 11 warehouses are:Germanium

44.5 tons

Ammonium Paratungstate (APT - (NH4)10(H2W12O42)·4H2)

10,450 tons

Bismuth

10,000 tons

Gallium

102.35 tons

Cobalt90 tons

Silver

3.47 tons

Antimony

440.55 tons

Vanadium Pentoxide (V2O5)

35 tons

Tellurium

30 tons

Selenium

20 tons

You may think, "big deal!" Well, think again. If Zhang's figures are to be believed, then this is a very big deal forsome metals—particularly indium, probably one of the largest around.
To give you an idea of what some of these stocks of metal could represent, here's how they stack up against the
U.S. Geological Survey's (USGS) 2013 figures for global production of each metal.

Metal

Global Production – Tonnes

Fanya's Stocks (% Global
Production)

Indium770

325.7%

Bismuth

7,600

131.6%

Gallium

280

36.6%

Germanium

150

29.7%

Tellurium*>95฀31.6%

Selenium*>2,334

฀1%

Silver

26,000< 1%

Antimony

163,000< 1%

Cobalt120,000< 1%* Total world production not provided because of lack of data from China and other major world producers.
Needless to say, the figures that really stand out are those for indium and bismuth, especially indium, whichshows more than three years of annual global production, and more than five times Chinese annual output, sitting
in warehouses in China.
Now, the exchange is three years old, so the indium stocks have been built up over this period. However, theexchange only started trading selenium and tellurium toward the end of last month—April 21 to be precise—andlook how much is already held.
Some Exchange Statistics
To quote some of Zhang's other statistics for the exchange:"Trading volume and Turnover: nearly 160,000 tons, with turnover above $32.7 billion;“Memberships: over 100,000 members (producers, traders, consumers, institute investors and personal
investors)""Clients Assets: $4.12 billion;""Sales amount for rare metal enterprises: $3.2 billion"

In addition, we learned that the exchange is adding some 500 new clients each day, and "$320 million of newclients assets per month," with considerable interest from the Chinese "Dama" or individual investor.

12

The Exchange's Three Stated Raisons D'Être
Perhaps one of Zhang's most illuminating slides was the one that provided
three raisons d'être for the exchanges existence:Global rare metal industry needs much more open data and a platform
integrating information flow, cash flow and logistics flow.

The global rare metal upstream and downstream industries need better
sales channels, more equal pricing forming system and morecomprehensive financial services.



Global capital market needs new investment targets of being modern andrepresenting high technology development.

Zhang was particularly keen to emphasize the last of these points, noting
later in her presentation that: "Rare metals become important investment
products which can keep value or anti-inflate in the era of electronic finishedproducts which are made from rare metals as the vital functional raw
material."

41ST ANNIVERSARYDINNERTUESDAY 21ST
OCTOBER 2014
Join MMTA Members
and Guests at The
InterContinental on
London’s Park Lane.

The exchange, therefore, provides not only institutions but individual
investors a handy way to invest in various minor metals. They can, if theywant, even take them home and put them under their beds. As Zhang sorightly pointed out: "With the real estate industry market going down, we
need to search for more and better investment categories in 2014."
Other Useful Reasons For Its Existence
In addition to these three, the exchange appears to serve several otheruseful and important purposes—as described by some of the speakers at
the exchange's third anniversary celebration on April 18.
Vis-à-vis the "rare metal industry" and "rare metal production," the exchange
enables China both to exert more influence and extract more profit.
According to Qinhua Wang, the vice chairman of China Nonferrous Metals
Industry Association:"We hope to increase Chinese speaking right of rare metal industry by theconnection between rare metal industry and financial industry.
"Although China has a very important position in rare metal production,
consumption and import and export, we have not enough influence on rare
metal in the world and we didn't get reasonable profit in the internationalrare metal industry.
"Under the circumstance that the prosperous development of strategic
industries, our position becomes more important. Minor metal, great
contribution! We expect to increase our rare metal's pricing mechanism andgreat influence on international market and strengthen Chinese market
speaking right gradually."And, according to Feng Cheng, chairman of China Chamber of Commerce ofMetals Minerals & Chemicals Importers & Exporters (CCCMC):"Seen from the worldwide value chain, Fanya is function as the protector of
Chinese rare metal resource and promoting the national market pricing as
well. In the meantime, Fanya also makes the ordinary investors get profit,
which realized the four parties win-win situation of country, industry,enterprises and investors."
On the pricing front, too, the exchange has been helpful to a number ofminor metal producers—extremely helpful if two producers, one of gallium
and one of antimony, are to be believed. And they are probably not alone:"Fanya, who combines with the real economy and capital achieves asurprising effect. I think the most sad thing is that we sell our resources atvery low price to overseas markets currently, but we have no resource to use
when our industry is well developed and upgrade to a new level in the future.
With the platform of Fanya, antimony enterprises need unite together tomaintain antimony market order and seek more reasonable pricing
mechanism." —China Minmetals Corp.

BOOKINGS FOR THIS EVENT ARENOW OPEN

13

CHINESE EXCHANGE FANYA STRIVES TO OPEN DOOR TO MINOR METALS INVESTING, CONT’D….
"Gallium is not raw ore, of which about 90 percent is extracted from the production of aluminium oxide. If we
don't produce the gallium from aluminium oxide, it will be washed away. Chinese gallium resource takes up
about 90 percent of the world, but current gallium price in the market failed to show its resource value, that is
to say that we give the resource to the overseas market without taking any payback. Gallium industry shouldhave a better future." —Libing Jia, Chairman of the board of Zhuhai Fangyuan
Some Observations
The discussion following the presentation, the last of the conference, could perhaps best be described as"lively," especially with the need for decorum to be maintained. (One need remember that many delegatesmake their livings trading the very metals Fanya is holding.)
However, perhaps understandably, very little concrete information could be learned from Zhang:

Q. Why so much indium, as opposed to silver – both are industrial metals?
A. It was the exchange's first metal.
Q. How much can the market move on Fanya?
A. There are market limits of 5-6 percent per day.
Q. Can people take stocks out?
A. They can take metals back home if they like.
Q. What stock levels is Fanya targeting?
A. Depends upon the market.
Q. Who is buying: industry or individuals?
A. Open an account and we'll tell you.
Q. Are individuals not being "seduced" into minor metals by adverts on TV and the like? There are not enoughof them and the volumes are too small.

A. There's a market in base metals. Why not minor metals? If it weren't Fanya, it would be someone else.
What To Make Of Fanya?
First and foremost, the exchange appears to function as a very useful domestic price support mechanism forvarious minor metals produced in China. Throughout Zhang's presentation, she returned again and again to thetheme of Fanya providing a way in which the "true" value of various metals could be realized. (The individuals
quoted above confirm this.)
Can individuals really take their metal holdings "back home" and pop them under the bed? I doubt it somewhat,
especially if they hold only 100 grams of this or that metal. And, as a corollary to this, when it comes to selling, I
can't see who would be on the other side of the deal, especially in a falling market.
Indeed, the fact that no information was forthcoming from Zhang on the split between institutional andindividual membership and/or trades makes one wonder whether it is small-time individuals who are being
targeted as investors. And if they are, and something goes wrong and they come to harm, what may the effects
be on the minor metals trade? (One need remember that this is China, where the concepts of culpability—
especially that of government officials—and individual rights are not necessarily the same as they are
elsewhere.)
And what's the government's involvement? The exchange must certainly have its, if only tacit, approval. Trade insuch metals is too important not to come under the purview of at least some part of the administration.
This could lead one to cynically surmise that the exchange and the stocks of metal it "holds" are actually a nifty
way for China's State Reserve Bureau to complement, with "buffer" stock financed by exchange members, thecountry's national stockpile of such metals.
In times of national emergency, who knows if the government would not see its appropriation (with or withoutcompensation) of these metals as perfectly justified? And in a crashing market, what easier way to pick up suchmetals at fire sale prices?
But I am probably being too cynical and, "[w]ith the real estate industry market going down," the exchange
does, simply—for Chinese investors anyway—offer an excellent investment alternative. Hey, Thomson Reuters,
Bloomberg and Metal-Pages either are, or will soon be, carrying Fanya data.

Tom Vulcan, Hard Assets Investor
14MINOR METALS & MAKE-UP: GET THE GLOW!
In the pursuit of beauty, for millennia humans having been putting all sorts of concoctions on themselves to dazzle
and attract, from crushed jewel paste by the Egyptians to the famous white lead based face paint used by Queen
Elizabeth 1st of England The modern age brings with it ingredients lists that you need a chemistry Degree todecipher.
The presence of metals in consumer goods, and in particular personal products such as toiletries and cosmetics, isoften the target of campaigns from supporters of more ‘natural’ products. An example of a metal often targeted inpersonal goods is aluminium and its role in deodorants, even with inconclusive studies demonstrating that the useof aluminium in this application has harmful effects. Concerns over unlisted and possibly carcinogenic substances
should not be ignored, but education needs to be key to demonstrate that some ‘metals’ have very interesting
properties that create excellent products and are not all dangerous or undesirable in cosmetics.
To continue on my Minor Metals journey of discovery, I was surprised to learn that mineral makeup, powders andeye shadows that create a ‘glow’ often contain bismuth oxychloride or titanium dioxide.
Bismuth oxychloride has a useful quality for makeup of excellent adherence to skin in addition to layers of atoms
in its structure that refract light chromatically creating an iridescent ‘pearl-like’ glow. Bismuth has been used as far
back as ancient Egypt as a cosmetic, mostly as a white powder. It is also used in pearlescent nail varnishes andlipsticks.
Another common method of obtaining a pearlescent finish in cosmetics is the use of mineral mica with a thin layerof titanium dioxide. The variation in the thickness of the top layer combined with the natural translucent mica
creates the pearl effect with lots of colours emerging. Titanium dioxide also adds ‘whiteness’ and opaqueness to
products such as sunscreen.

Bismuth Facts

Used in a number of pharmaceutical, electronic and industrial applications.



A fragile pinkish-white metal that was long confused with lead, tin and zinc.

Bismuth is typically recovered as a by-product of lead and copperThe main mining areas for bismuth are Bolivia, Peru, Japan, Mexico, Canada and Australia.

Tamara Alliot, MMTA Development Coordinator
15

MANAGING REACH FOR
MANUFACTURERS AND
IMPORTERS—HOW
COMPLIANT ARE YOU?
Join us for this essential
one-day course
When: 10th September 2014
Where: MMTA Office, London

The programme includes:










Summary of duties ofmanufacturers andimporters
Managing business
impacts
Conducting an internal
audit
Supply chain issuesnon-EU suppliers andEU suppliers of raw
materials
Supply chain issuescustomers
Conducting a supplier
audit
Implications of getting it
wrong

Member price: £295 +VAT
Non-members: £350 +VAT
Lunch and refreshments
are provided

MINOR METALS IN MEDICAL APPLICATIONS
Some of the most well-funded, innovative and creative research goes into
the area of medical materials. Cutting-edge technologies are used to save
lives and improve the quality of day-to-day activities. Minor metals are at
the forefront of this research, with fascinating applications being
developed all the time.
It is impossible to tackle all the metals and their diverse applications in one
article, so The Crucible will launch a series of Minor Metals in Medicine
pieces to give this sector the attention it requires.
Many readers will be aware of applications such as Co-Cr alloys inreplacement joints and dental implants—to be covered in-depth in a future
piece in the series, which will also include titanium in instruments andother applications, as well as inside the body, magnesium, 3D printing anddissolvable parts.
This short introductory piece offers an overview of some less well-known
applications, as well as the presence and purpose of metals naturally
occurring in the human body. Below is a ‘Biomedical Periodic Table’,showing not only that many elements are essential to life, but also the roleof metals in chemotherapy and diagnostics. Metals in the body contributeto basic functions such as growth, fertility and organ function, and having
deficiencies in certain metal-ions can lead to severe illness and even death.

Key
Pink: Essential elements, Orange: non-metallic essential elements
Green: Elements possibly beneficial for life
Blue: Elements for chemotherapy and diagnostics
Purple: Essential elements also used in chemotherapy
When thinking of metals in medical applications, ‘structural’ parts may wellbe the most prominent, for example hip joints and implants, but in fact
there are many other treatments and drugs that are based on metals. As
highlighted in the table, the most widely-used drugs in chemotherapy aremetals-based, often based on platinum group metals, for example rhenium
and rhodium. The ‘Australian Research Network for Metals in Medicine’currently has a number of projects with promising results that involve a
range of different metal-ions including those of cobalt, copper, gold, iron,molybdenum, niobium, platinum, ruthenium, tin and titanium. It is alsointeresting to note that the main treatment for bi-polar disorder, which
affects around 1% of the world’s population, is with lithium-ion therapy.
Metals also have anti-microbial properties, with many metal mixtures
having powerful anti-microbial qualities. Many are already in common dayto-day use in areas such as silver bandages for treatment of burns, zincantiseptic creams, bismuth drugs for the treatment of ulcers, and metalclusters as anti-HIV drugs. Bismuth is also used in popular indigestion
medicines.

Tamara Alliot, MMTA Development Coordinator
16GREENLAND—EU RAW MATERIALS COLLABORATION

How can the EU and Greenland collaborate on raw
materials mining and processing? A wide range ofissues, including availability of mineral resources,
funding sources for the development of mining, notto mention infrastructure development and supply
chain considerations, all play a role in whether thiswill be a viable collaboration.
Greenland has resources of REEs, critical and noncritical raw materials, including molybdenum,
vanadium and gallium amongst others, and a recent‘letter of intent’ between the EU and Greenland isintended to herald a new era of enhanced
cooperation between the two.
However, gaining funding from European banks, aswell as a lack of processing infrastructure in Europe,
are hurdles which would need to be overcome.
Before investments are made, geological knowledge,
environmental risks and the infrastructure fromtransport to processing all need to be assured. If the
EU were to invest in raw materials in Greenland, itwould be important to create a win/win situation,with education and infrastructure development forGreenland and, in return, increased security of raw
materials’ supply for the EU.
Greenland looks attractive, but most areas of thecountry have challenging and/or costly implications
with a lack of local technical knowledge, labour force,
under-developed infrastructure, local opposition anda complex supply chain with processing locatedelsewhere. Nevertheless, the importance ofsustainable primary supply is one of the four facets ofreducing the criticality of materials, the others being
substitution, material efficiency and recycling.
Greenland’s arctic ecosystem and desire to protect its
fishing industry—the second largest sector after
commerce - are key considerations when developing
mining. Creating a fair and ecological supply chain is a
growing issue and there is increased media focus on
reputational risk for companies, as well as analysis of
the impact of consumption in the European
population.
There are some junior mining companies already insitu, but these can be very small, high risk venture
capital companies, and they are not necessary strong
technically or knowledge-wise.
There is a very clear political objective for an EUGreenland cooperation, but at this point in time, aframework is lacking that would allow actual
implementation of projects.
This is a summary of some of the issues raised at
the Stakeholder Workshop on EU-Greenland
Co-operation on Raw Materials, Brussels 17th
June, led by DG Enterprise & Industry
The full report and presentation slides from theworkshop are available on the Members’ Area under‘News and Views’.

17CRM INNOVATION NETWORK—SUBSTITUTING CRITICAL RAW MATERIALS
2nd Innovation Network Workshop, Brussels, 14th May 2014
What is the CRM Innovation Network (CRM_InnoNet)?
Project Objectives
Mapping of critical raw material substitution initiatives: CRM_InnoNet will employ a ‘top down’sector-based approach to identify potential bottlenecks in the raw materials value chain and a ‘bottom
up’ raw materials-based approach, including mapping of on-going initiatives in the field of substitutionof critical raw materials at the EU and Member States level.
Prioritisation methodology: CRM_InnoNet will develop a methodology to establish clear criteria forthe prioritisation of applications which are at ‘threat’ due to resource scarcity and identify
opportunities for technological and non-technological development in the field of substitution ofcritical raw materials.
Substitution Roadmap: CRM_InnoNet will propose a roadmap for the substitution of critical raw
materials in five key applications.
Innovation Network: The Innovation Network will constitute a dynamic, open and proactive platform
for the entire stakeholder community.
Policy Recommendations: CRM_InnoNet will prepare recommendations, future initiative ideas andsuggested actions for policy makers.

Around 130 people gathered together in Brussels for the 2nd Workshop on the substitution of Critical Raw
Materials, run by the CRM Innovation Network. The Network sees substitution as the solution to reducing‘criticality’ of the EU CRMs. During the workshop, academics, research institutes and industry representatives
gathered to discuss the many projects launched on substitution.
During the day, delegates had a chance to discuss with the group their own ideas and specific challenges facing
their substitution projects, as well as other methods to decrease criticality. The group aims to make an
integrated community to drive innovation in substitution of CRM projects.
Starting the day, we were introduced to some of the challenges that the world faces in the coming years. Dr
Claire Glaessen drew our attention to the fact that by 2050 there will be an estimated 9.5 billion people in theworld with 3 billion of these falling into the middle class category, with increased spending power, placing ahuge demand on consumer goods and technologies such as smartphones, TVs and computers. Ensuring thatthe raw materials are available to sustainably meet this increased demand is essential, affecting not only the EU
but the entire world.
The network focused on 14 CRMs, increased to 20 (new list released 26th May—see opposite for more
information), but they are also making sure that the substitution projects are aligned with the aims of industry
and materials that actual businesses deem ‘critical’ to their operations beyond what the EU has decided isimportant.
The next session included presentations on the ‘Mapping of the CRM landscape’ and analyses on different
industries such as ICT, electronics, energy and transport. The group also outlined their roadmap for material
substitution and what they envisage happening after the end of the project in late 2015. It was considered
important that the projects carry on well after the end of the Network, as a longer time schedule is needed tocommercialise these innovative projects and make a ‘real’ difference to criticality.
Afternoon sessions were on ‘Materials for Aeronautical structures: reason and rules for material change’ (a longand extremely complex endeavour which includes complete re-design of the part when changing the material)
and a presentation on ‘Risk Assessments in material supply chains’ by David Gardner from C-Tech Innovations.
This project was developed in response to the UK Resource Security Action Plan and looks at how SMEs canidentify potential ‘hotspots’ or ‘criticalities’ for themselves. Funded by the UK Government and the CRM
Innovation Network it offers a methodology on how to complete an assessment simply and with little time
investment. The next step for this project is to produce an official standard.
Speakers stressed that straight substitutions of one material for another is only one of several options. Service
for product, process for process and new technologies for substances are all ways to reduce dependence on
CRMs. An example of this may be the ‘leasing’ of products instead of buying, with the product returned to the
manufacturer at its end-of-life and the consumer provided with a new model. The returned product could berecycled or refurbished creating a closed-loop economy.

18

The MMTA attended the workgroup session on high-value alloys withrepresentatives from Tata Steel, GE, the nuclear industry and aerospace
manufacturers. Some of the discussions included emphasising that longtime frames are need in these industries to introduce new materials, andthat there are many difficulties in straight swapping of one material for
another.
Trade issues were also mentioned, with the confusion between pricevolatility and supply risk not being appropriately differentiated in thediscussion of CRMs by experts, and how instead of just substitution, tradeissues also need significant attention.
The group also examined the recommendations of a previous group of
experts to ensure a sustainable supply of CRMs, with some of the possible
policy interventions to help with criticality as follows:Harmonized legislation across countries

Reliable certification of products from all countries



Education and industry-driven research initiatives, with a a pre-requisite
for EU funding being an industry focus

Improved export legislation with the monitoring of the export of waste

Finally, may we draw the attention of Members to the ‘Critical Raw Materials
Substitution Profiles’ which are still open for comment until August 2014.

This Week in Rare EarthElements
By J.A. Green & Company
This Week in Rare Earth Elements,
China’s General Administration ofCustoms released the most recent setof export statistics for rare earth
elements for the month of May. The
United States was the single largest
export destination for rare earthmaterials, representing 42% of exports
at an average value of $7.86/kg. Japan
holds the top overall position for rareearth exports for the year but fell to thesecond position for the month of May,
with a much higher average value of$13.28/kg. The European Union
represented the third largest export
destination, with an average value of$18.21/kg.

In other market news, the Roskill
This is a valuable opportunity to influence the documents and inform others Consulting Group has released its moston whether substitution is possible or not of a particular material.
recent report on the rare earth market,
finding that China will account for 70%
Visit http://www.criticalrawmaterials.eu/documents/project-disseminationdownloads/raw-material-profiles/ and register for this site, which alsoof rare earth demand, followed bycontains a library interesting documents on the use of CRMs in various
Japan (15%) and the United States
sectors.
(10%). China is also expected to accountfor 83% of global supply, followed by
North America (7%), Australia (6%), and
PUBLICATION OF THE NEW EU CRITICAL RAW MATERIALS
Europe (2%). The outstanding balance
for both demand and supply come from
LIST AND REPORT
the rest of the world.

Update from the CRM Alliance:

presented;

The European Commission has now published a Communicationon ‘the review of the list of critical raw materials for the EU and theimplementation of the Raw Materials Initiative’. According to the
document, a new key priority is to ensure a sustainable supply of
raw materials within the EU, especially as regards framework
conditions for mining and improving the raw materials knowledge
base.

Start preparing for the next strategic programming phase forresearch in 2014 covering 2016-2018;

As expected, it contains 20 critical materials: antimony, beryllium,
borates, chromium, cobalt, coking coal, fluorspar, gallium,
germanium, indium, magnesite, magnesium, natural graphite,
niobium, PGMs, phosphate rock, heavy REEs, light REEs, silicon
metal and tungsten. To access the Commission website, pleaseclick here.
Expected next steps by the European Commission:
Setting up a pan-European knowledge base of non-energy, nonagricultural raw materials by 2020;

Selection process for a Knowledge and Innovation Community on
raw materials with a call running until 10 September 2014;
Final meeting of the European Rare Earth Competency Network
project at the end of 2014;
During 2014 further raw materials diplomacy events to take place(Greenland, African Union, USA, Canada, etc)
Trade negotiations with a special emphasis on the Transatlantic
Trade and Investment Partnership with the United States;
To boost resource efficiency and increase the amount of recycling highest priority in 2014 is on the waste policy review
The Communication was published together with:
Critical Raw Materials report

Preparing an issues paper on seabed mining by the beginning of2015;

Annex to the CRM Report

Communication on the European Innovation Partnership (EIP);

CRM profiles

Annual high-level conference on the EIP in the autumn in Italy
where a number of key ‘raw materials commitments’ will be

Non-CRM profiles

19

KEY ASPECTS OF REACH COMPLIANCE

Lisa Allen – Technical Manager,
REACHReady Ltd
Lisa is a chemist with many years ofcommercial experience. Her roles
have included working with membersof the supply chain to deliver new
products and re-formulations tomeet demanding specifications.
In her role as Technical Manager, Lisa
provides direct assistance for
REACHReady subscribers, as well as
technical guidance. She oversees thetechnical content of REACHReady’s
training programme, and provides
REACH-related training throughpublic workshops and seminars. She
is an experienced speaker on REACH
both within the UK and internationallyand has had a number of articles
published.

20

More than a year has now passed
since the second REACH registration
deadline, which applied to substances
manufactured and imported inquantities of 100 to 1,000 tonnes per
year per legal entity. For that deadline,
some 3,215 companies submitted
9,084 dossiers to the European
Chemicals Agency, ECHA. Thoseregistrations concerned almost 3,000
substances and included many minor
metals and their compounds which
had not been registered for the firstdeadline of 1st December 2010, forexample lithium, tantalum,
neodymium, tungsten carbide andvanadium dioxide.
In the early days of REACH one could
perhaps be forgiven for regarding
registration as the end point in acompany’s compliance plan. To makea registration is no small
accomplishment: if you are one of themany companies having already been
through the process you will no doubt
appreciate the effort – and cost –involved. However, as the impact ofother REACH processes, namely
evaluation, authorisation andrestriction, are realised, it is easy to
see that making a timely dossier
submission is only one aspect of an
ongoing compliance project.
What is Evaluation?

The “E” of REACH consists of two
processes: substance evaluation anddossier evaluation. The former iscarried out by Member States andseeks to answer the questions, “arethe risks already controlled?” and “are(further) legislative controls required
to protect human health and theenvironment?” It can result in
additional testing and datarequirements (which may go beyond
the standard information
requirements in Annexes VII to X to
REACH), to which active registrants
may need to contribute in order tomaintain their registrations. In April
this year, the first draft decisions on
37 substances evaluated under theCommunity Rolling Action Plan(CoRAP) in 2013 were issued toaffected registrants where further
information was deemed necessary toassess the safety of those substances.
Possible outcomes of substanceevaluation where the data available
are sufficient for the Member State toconfirm the risk include proposals for:harmonised classification andlabelling under the CLP Regulation,
inclusion in the Candidate List of
substances of very high concern(SVHCs) for authorisation, or Annex
XVII restriction – as well as no further
controls being required.

In contrast, dossier evaluation, which
comprises compliance checks onregistration dossiers and examinationof testing proposals for higher-tier(Annexes IX and X) information
requirements, is carried out by ECHA. It
seeks to instil confidence in thecompliance of registrations and may
again result in registrants being
required to submit updated dossiers tomaintain their registrations, either
spontaneously or at ECHA’s request.

evaluation, ECHA used both random
selection and electronic concern-based
screening methods to identify dossiers,
either for overall or for targeted
compliance checks.

In an overall compliance check, ECHA
looks to verify that the informationnecessary for the safe use of thesubstance is present in the registration
dossier. For the targeted checks, thefocus is on specific parts of the dossier;
ECHA may escalate a targeted
compliance check to an overall check if
Focus on dossier evaluation
significant non-compliance which
By the end of 2013, the Agency had
requires further assessment iscompleted compliance checks on 1,130
identified. Unfortunately, registrantsof the 19,772 registration dossiers
are not routinely informed that their(5.7%) submitted for the 2010 deadline.
dossier has been selected for
In early 2014, ECHA announced that
evaluation.
69% of the evaluated dossiers were
found to be non-compliant. The mostResults of dossier evaluationcommon shortcomings were
There are three possible outcomes of
deficiencies in the substancedossier evaluation: a decision
identification information, andrequesting more information, a Quality
insufficient justification where studies
Observation Letter (QObL)
had been waived or where information
recommending improvements, or no
was missing from the Chemical Safety
registrant action is required. QObLs
Report.
and decisions are delivered
ECHA’s substance identity campaign electronically to the registrant’s REACHIT message box; unfortunately ‘no
In 2013, as part of its campaign toaction’ results are not currently
encourage registrants to improve thecommunicated to the registrant,
quality of their registration dossiers,
positive feedback which could prove
ECHA conducted IT-based screening on
useful.
the information required for substance
While a QObL is not a formal part ofidentity on all REACH registrations
the legal text it is a pragmatic approach
received. Subsequently, in April thistaken by ECHA to indicate where theyear, ECHA sent 1,350 lettersregistrant can improve the dossier. The
concerning 309 substances for which
QObL also suggests a deadline for the
shortcomings were identified in theregistration dossiers. The letters invite voluntary update, normally between six
and twelve months. The relevant
registrants to make spontaneous
Member State Competent Authority is
updates to their registrations within
informed; follow-up action isthree months, providing guidance on
monitored by ECHA and reported to
how to address the issues identified.
the Member State.
To help registrants comply, ECHA also
In the case of missing information, a
released an update to the TechnicalCompleteness Check plugin for IUCLID, draft decision triggers a more formal
process. For overall compliance checks
which contains a Dossier Quality
thAssistant, and hosted a webinar on 30 (approximately 30% of dossiers
evaluated) – but not targeted
April specifically for companies thatcompliance checks – the registrant has
had received a letter in light of thethe opportunity to participate in a
substance identity campaign.
conference call with ECHA within 10
Dossier selection process
days.
REACH requires ECHA to evaluate at
A registrant in receipt of a draft
least 5% of the dossiers submitted per
decision related to either type of
tonnage band, but the Agency may
compliance check must submit any
examine any registration dossier tocomments it wishes to make within 30
ensure that the contents are indays of that draft decision.
compliance. In the first series of dossier

REACHREADY MMTAPARTNER AGREEMENT
Whether you have alreadyregistered or have an
obligation for 2018,
REACHReady will be running
regular Maintaining your

REACH Registrations
workshops to help you
understand dossier quality
requirements and theimplications of evaluation
and CoRAP. We aim to help
you understand what action
you need to take to maintainyour registration dossier andensure that you can achieve
requests made by theauthorities.
If your company hasregistration obligations, if
authorisation or restriction
affects you or your supply
chain, or if you need advice
on any other aspect of
REACH compliance, why notsign up as a REACHReady
Gold subscriber? This gives
you access to our technicalguidance and our telephoneand email Helpdesk, as well
as regular news alerts anddiscounts at REACHReadyworkshops.
MMTA Members are entitledto 25% off the cost of Gold
subscription – just £300
+VAT per year, on an
individual basis. Sign up at
www.reachready.co.uk
21

KEY ASPECTS OF REACH COMPLIANCE, CONT’D….

MMTA SPONSORSHIP A review by the Member StateFOR 2014
WOULD YOU LIKE TO
SPONSOR THE
41st ANNIVERSARYDINNER?
Sponsorship benefits are
tailored to you andinclude:Your name linked to theevent for the duration of
the marketing
Clickable logos on thewebsite and in the
CrucibleMarketing materials at
the eventFree event placesPreferential or freeadvertising in the Crucibleor Annual Review 2015

CONTACT THE
EXECUTIVE TEAM TOCUSTOMISE YOURSPONSORSHIPPACKAGEAdvertising andpromotion options alsoavailable for all
budgets for sponsorsof the New York Dinner
and Christmas Lunch.

Minor Metals Trade Association
Suite 53
3 Whitehall Court
LondonSW1A 2EL
Telephone: +44 (0)207 833 0237
Fax: +44 (0)207 839 1386
Email: executive@mmta.co.uk

22

Competent Authorities follows: where
amendments to the draft decision areproposed by Member States there is asecond 30-day commenting roundavailable to the registrant, followed by
a 60-day period for the Member State
Committee to seek agreement on thedecision. If there is disagreement inthat Member State Committee theEuropean Commission will take thefinal decision; where there isunanimous agreement, or no
proposed amendments, the final
decision is taken by ECHA.
What can you do?

If you have already registered andhave received a final decision you
must submit the required information
to ECHA in an updated dossier by thedeadline set. If the decision is still indraft, the commenting procedure may
still be open to you – keep an eye on
the dates and the information in your
REACH-IT message box! Where
offered, make use of the conference
call with ECHA as it can resolve many
issues raised by the draft decision. For
decisions related to targeted
compliance checks, we suggest you
refer to the series of ECHA webinars
for detailed information on
addressing the shortcomings in yourdossier. We also recommend keeping
a copy of any comments you make via
the web-form regarding the draft
decision.
Where a lead registrant receives adraft decision relating to shared
information they should inform themembers of the joint submission assoon as possible. Joint registrants are
obliged to contribute to the sharedcosts arising from an evaluation
decision, such as the commissioningof new studies, in order to maintaintheir registrations.
If shortcomings in the quality of yourdossier were identified, but therequired information was deemed tobe complete, you should havereceived a QObL – prompting you tomake a spontaneous update.
Even if you don’t have a registration
obligation until 2018, the results of thefirst round of dossier evaluation

should help you improve your dossier
to avoid formal decisions or Quality
Observation Letters in the future.
Controlling chemicals of concern
The REACH Regulation provides two
mechanisms for the authorities tocontrol chemicals of concern:
authorisation and restriction. The
former is the process by which
Member States and ECHA (at therequest of the European Commission)
propose substances for inclusion on
the Candidate List and subsequently
Annex XIV (the Authorisation List).
Once included in Annex XIV asubstance cannot be used or placedon the market in the EU after the“sunset date”, unless an exemption
applies or a valid application ispending. There are currently 151
substances on the Candidate List, 22of which are listed in Annex XIV.
Annex XIV includes a number ofchromium (VI) compounds, diarsenic
trioxide and diarsenic pentaoxide; afurther five SVHCs wererecommended by ECHA for inclusion
earlier in the year.
In 2013, ECHA received eight
applications for authorisation fromseven companies, covering 17 uses
and two substances, DEHP and DBP.
Late last year, ECHA’s Risk Assessment
and Socio-Economic Assessment
Committees (RAC and SEAC)
concluded that “adequate control” hadbeen demonstrated by the very first
applicant for Authorisation – RollsRoyce plc – for the use of DEHP in the
production of aero engine fan blades.
In light of the Committees’ favourable
opinions, the first authorisation is
likely to be granted this year by theEuropean Commission, subject to aseven-year review period.
ECHA expects to receive twice as
many applications for authorisation in2014, in particular fortrichloroethylene and chromiumcontaining substances. To support
applicants, a new ECHA-EASA(European Aviation Safety Agency)
report has been published whichhighlights the key aspects of theauthorisation process. Although thereport was prepared to facilitate theaviation industry's compliance withthe strict EU airworthiness standards
which may require the use of Annex
XIV substances, it also provides bestpractice advice that can benefit otherindustry sectors.
In contrast to authorisation,
restriction can be used to control
broad, or very specific, risks related
to a substance or substance type.
There are more than 60 entries inAnnex XVII to REACH; an example is
the restriction on the use of mercury
in fever thermometers andmeasuring devices. Annex XVII has
been amended some fifteen times
since it took effect in June 2009,

mainly to include new substance
restrictions or amend existing
provisions.
Staying abreast of changes to theselists of chemicals of concern is an
important part of any company’s
ongoing compliance management.
REACHReady subscribers can accessa consolidated list of the Annex XVII
restrictions, as well as copies of the
REACH legal text and amending
regulations, from the website. Our
Technical Alerts also highlight whensubstances have been included in the
Candidate List, the Authorisation Listor Annex XVII.

Lisa Allen, REACHReady

DIARY DATESWogen vs MMTA Cricket
16th July 2014
LondonCourse: REACH—are you
compliant?
10th September 2014
MMTA Office, London
BOOK ONLINE NOW

41st Anniversary Dinner
21st October 2014
Intercontinental Hotel,
LondonBOOK ONLINE NOWSPONSOR THIS EVENTMMTA CONFERENCE—TORONTO 2015

New York Dinner
4th December, 2014
Circus, New YorkREGISTER YOUR INTERESTSPONSOR THIS EVENT

THE MMTA’S INTERNATIONAL MINOR METALSCONFERENCE 2015 WILL TAKE PLACE AT
THE FAIRMONT ROYAL YORK HOTEL, TORONTO,
FROM 27—29 APRIL 2015.
Be sure to take full advantage of the MMTA Members’

MMTA Christmas Lunch
17th December 2014
Ironmongers’ Hall, London
REGISTER YOUR INTERESTSPONSOR THIS EVENT

Early-Bird Rate which is now available. If you are not yet
an MMTA Member, don’t delay in completing yourapplication to ensure your Member discount.
We will once again be hosting a high-quality speaker programme, as
well as excellent networking opportunities.
23

A VIEW ON THE RWANDAN MINING SECTOR AND COMMENTS ON
THE IMPACT OF ‘CONFLICT-MINERALS’ REGULATIONSArtisanal miners in Eastern Rwanda

Rwanda is a resilient, forward looking country with a vision to elevate itself to a
middle income, service and knowledge based economy by 2020. The key
achievements during the last ten years include growing the economy at an
average GDP of 8% per annum, with the aim to achieve 11.5% from 2012 to2017.
As of 2013, the growth of the GDP per capita was $693 from $644 in the year
2012, a 3-fold increase ($220) from 2000. The Rwandan GDP per capita target is$1,240 by 2017.
Rwanda’s strong performance is largely driven by the expansion of the service
sector which accounts about 45% of GDP compared to 33% and 15%
contributed by agriculture and industrial sectors respectively. Inflation in
Rwanda has been kept at a single digit since 2008.

Artisanal miners treating coltan in
Eastern Rwanda

In the Rwanda national economy, the mining sector occupies a very crucial role,currently being the second highest foreign revenue source next to tourism. The
sector represents 67% of principal exports and last year, it generated $226
Million with 8,188 tons of mineral exported, mainly tin, tungsten and tantalum.
The mining sector in Rwanda counts 682 mine sites operated by 245 private
mining companies and artisanal cooperatives and 23 mineral processing andexporting companies. It employs 33,638 people of which 16% are women.
The key actions of the Government toward the sector are focusing on
increasing mineral production and export earnings, value addition anddiversification, capacity building, streamlining legal and institutional frameworkand exploration of new mineral Prospective Targeted Areas (PTAs), with the aimof transforming the mining sector.

Tunnel in an artisanal mine inWestern Rwanda

Tungsten miners in Northern Rwanda

Rwandan miners being trained

24

The Government of Rwanda funded exploration works in 4 PTAs located in the
districts of Kirehe, Nyagatare, Muhanga and Nyamagabe; the initial study wascompleted in 2013. Of these 4 PTAs, 14 New Interesting Areas (NIA) that neededadvanced exploration were delineated. Results have indicated that, in addition
to the traditionally known minerals ( 3T ‘Tin, Tantalum, Tungsten’ and Gold),
there is high potential of new types of minerals including Rare Earth Elements,
niobium, lithium, beryllium, silver, cobalt, nickel, copper, zinc, and lead. The
Rwandan Government has committed funds for further exploration works in
the NIA and in three other PTAs for the year 2014-2015.
In the framework of
attracting investment
and streamlining thesector, a new mining
code, morecomprehensive andinvestor friendly, wasdeveloped andapproved by the
Parliament in February
this year.
In addition, theGovernment of Rwanda
has invested hundredsof thousands of dollars
New areas of interest
to develop a modern
discoveredmining cadastre system.
This system is replacing
the paper based system which was time consuming and less efficient. The new
system is enabling the government to monitor compliance for the sector interms of managing licenses, work commitments, social and labor plans,
environmental permitting, royalty and tax payments, and extractive industry
transparency-initiative reporting. It also provides security of tenure for mining
companies, allowing them to seek capital funding to further their projects, aswell as providing additional confidence for investment for large international

mining companies.

A Tunnel Under Development in Eastern Rwanda

In order to control and monitor the operators in the sector, the Ministry in charge of mining has developed auser-friendly reporting template which will apply for both mining and mineral trading businesses. In addition,
the reports will show details on all actors in the supply chain from the mine of origin up to the export point;
this will bring more transparency and increase credibility in the Rwandan minerals supply chain. These arebeing done in the framework of streamlining mining and minerals trading activities by ensuring that laws andregulations are well understood and implemented by actors in regard to responsible sourcing and supply ofminerals.
This goes hand in hand with the Regional Certification Mechanism (RCM) and the mineral traceability schemein line with the OECD due diligence guidance for responsible supply chain of minerals as well as the ICGLR
Regional Initiative against the Illegal Exploitation of Natural Resources. Rwanda has implemented theseschemes since 2011, and currently, 100 % of all minerals produced, processed and exported from Rwanda aretagged, and the supply chain of minerals on both ends are traceable.
It is important to note here that Rwanda was the first country in the region to issue, in November 2013, thefirst ICGLR Conflict Free Certificate for mineral export.
So far, 22% of all mining companies operating in Rwanda have been inspected in respect to the ICGLR
requirements (which themselves are based on the OECD standards), a record in the Great Lakes Region, thecountry intends to have them all inspected and classified by July 2015.
Despite the achievements and progress made so far; the Rwandan mining sector is facing a number ofchallenges which are mostly related to the implementation of the so called “conflict-minerals” regulations.
Each country has its particular plans and concerns over its minerals resources; For Rwanda, the 3Ts (tin,tungsten and tantalum) and gold are currently the pillars of her mining sector and in fact they are all labeled as“conflict-minerals”.
Basing on the criteria set in the OECD guidance1, Rwanda is neither a Conflict-Affected nor a High-Risk area.
However, in order to ensure that mining activities are undertaken in accordance with best practices, Rwanda
went ahead and put in place numerous measures aiming to standardize, harmonize and increase transparency
in mining and minerals trading.
Due to reasons beyond its control, Rwanda is obliged to put in place regulations and carry a heavy burden inorder to comply with requirements most of the time dictated by commercial interests or set without
considering the realities on the ground and without taking into account the views of concerned communities.
1

OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas

25

A VIEW ON THE RWANDAN MINING SECTOR AND COMMENTS ON
THE IMPACT OF ‘CONFLICT-MINERALS’ REGULATIONS CONT’D...
Furthermore, for whoever sourcing minerals
from Rwanda, there are no risks of funding
armed conflict, widespread violence and war or
human rights abuses. Therefore, as far as
conflict-minerals are concerned, we should
avoid a ‘copy and paste’ approach in solving thisproblem. Realities and challenges are different
in countries covered by the section 1502 of the
Dodd-Frank Act, consequently the appropriate
approach in finding solutions should be “caseby case”. Indeed, the weight of the solution
should be proportional to the weight of the risk,rather than applying one standard to all
countries and at all stages of the minerals
supply chain.
On the other side and despite the fact that,
Sacs of Rwandan tagged minerals
since 2011, Rwanda is implementing the OECDdue diligence recommendations in regards withconflict minerals and has implemented a minerals traceability mechanism in collaboration with ITRI, at the
beginning of 2014 companies which process wolframite have begun refusing to buy the tungsten ore, even if it
is traceable and conflict-free.
The most probable reason for this recent change may relate to the start of the US Securities and Exchange
Commission reporting deadline in relation with the Dodd-Frank Act and possibly other customer demands.
Certain companies seemed to take advantage of this to pressurize their intermediate suppliers to stop buying
anything from Africa. Those companies would then have an advantage in the market – by cutting out some of
their competitors.
Apart from the consequences which will affect the Rwandan mining sector by negatively impacting on theexport earnings, production volumes, employment, etc. There are several other consequences including
decrease in wolframite prices, lowering attractiveness of investment in the mining industry which in end mayundermine the work being done to promote responsible minerals sourcing due to disengagement bydownstream users from the region.
Rwanda understands and appreciates the genuine objective of initiatives andregulations aiming to break the link between conflicts and natural resources.
However, currently all the burden is carried by artisan and small scale miners,
the regulations are heavily impacting on mining companies and national
economies. There is an urgent need of engagement by downstream
companies and end
users, these two
Locations of Rwandan mine sites under iTSCi traceability scheme
important actors
should participate
directly in funding
and supporting
responsible sourcing
initiatives put inplace in the Great
Lakes region.

Evode Imena is Ministerof State for Mining
Ministry of Natural
Resources, Rwanda
June 9, 2014

26

There has been, forlong time, a bad
publicity on “conflictminerals”; a coltan2
miner or trader was
nearly considered asa criminal; which is
not true. Tin, tungsten, tantalum and gold are sources of income forthousands of African families and a pillar to the economic development ofthemselves and their countries. Now, it is time to change the mindset and tell
the world that tin, tungsten, tantalum and gold are not the symbol of conflict;they are rather the symbol of hope, prosperity, growth and development.
2

Coltan: The local name of niobium-tantalum ore

RWANDA MINING SECTOR PROFILE
Mineral exports have room for growth

MMTA OFFICE MEETINGROOMFREE USE FOR
MEMBERSCENTRAL LOCATION

Click here to book the






Rwanda’s main mineral exports are ores processed to extract tin, coltan
and tungsten.
Two important gold deposits have been discovered
Mining is the second largest export in the Rwandan economy. In 2013, thesector generated about $226.2 million of foreign exchange.
In 2013, the percentage variation of increase was 66%.
5 year average (2009-2013) growth for the sector was 33%.

What is being done to develop the sector?
 The Government invest in mineral exploration works and geological dataacquisition to attract investors;
 Private companies are given incentives to explore and develop mining
projects;
 Prospective areas for REE, Nb, Li, Be, Co, Ag, Ni, Cu, Pb and Zn have been
discovered; A strong, investor friendly legal and policy framework has been put inplace.
Opportunities in the sector
 Value addition: currently, all mineral ores produced in the country areexported as raw mineral concentrates. There are opportunities to smelt
and refine minerals and for plants to cut and polish dimension stones.
 Industrial mining: Modern technology is needed to scale up operations toan industrial level and increase production.
 Exploration
 Gemstones mining and processing
 Trade in minerals substances Trade in mining equipment

MMTA meeting room.



Screen, projector &flipchart



Wi-fi



Tea, coffee, waterprovided—otherrefreshments can bearranged at cost

Library and PC resources

Flexible booking andcancellation — just email us

27