 (CNN) – In the race for higher technology, companies in North America, Japan and Europe are leaps ahead of China.But those companies –- and the countries that depend upon them –- are waking up to the fact that China has a lock on rare earth metals required to make advanced technologies, such as lasers and hybrid car batteries. Japan found that out in September when China announced plans to reduce the amount of rare earth metals exported to Tokyo during the height of tensions between the Asian powerhouses over sovereignty of islands in the East China Sea. China said the decision was due to environmental reasons. Now a story in The New York Times suggests that China is also reducing the amount being exported to the U.S. and Europe. China has denied the report. Regardless, the incidents reveal a strange symbiosis in the global market –- makers of the defense products for the U.S. military rely upon raw materials from China. “The Americans in their wisdom have strengthened the battle tanks with armor that requires rare earths from China –- nowhere else in the world can it be found,” Chris Hinde, editorial director of Mining Journal, said last week at a conference in Hong Kong. “All the major metals face long-term problems because there are less discoveries being made. You can expect metal prices to keep going right up. But right now, the real excitement is with rare earths,” he said. If you recall from high school chemistry, the rare earth metals are the second last line shown on the Periodic Table of Elements that hung on the classroom wall, ranging from Lanthanum to Luteium –- 17 in all. “A lot of rare earths and other ‘exotics’, as they’re called, display peculiar properties and are used in specialist applications like mobile phones and laser technology,” Hinde said. Ninety-five percent of all rare earths currently come from China. “And the non-Chinese deposits of rare earths the Chinese have tended to try to buy up as well,” Hinde said. “China controls the rare earth market.” That promises interesting days ahead for companies that depend upon rare earth metals, and it gives China a rare bargaining chip. Will China’s unique position to restrict these minerals constitute unfair trade practices with the World Trade Organization? On the other hand, what nation has the right to dictate what China does with its own natural resources? |
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Reducing export is not enough. There should be a total ban on export of rare earth. China is not the only country having rare earth resource, and China's deposit is not even enough for its own use. Why the heck China must provide these materials to the world while other countries keep their mines untouched?
Please shut down the rare earth mines, and keep them for the next generation, just like other countries.
IF today it is America that is exporting these 17 minerals and the processed products (refined rare earth metals), in the scheme of the export control list, what are the chances that China would actually get ANY, given the "critical military significance" of these metals?
Beijing still has a bunch of Black Hawks sitting on the tarmac, unable to fly since America won't supply the spare parts – not even for emergency rescue during the Sichuan Quake a couple of years back..
What is good must be universal. The trade rules ought to be reciprocal, if indeed these goods are so very strategic and are critical for military production.
Same event happened to China barely 100 years ago. Back then China was forced at gun-point to export this thing called tea.
Are rare earths China's 21th century's tea? It begins to look like it, doesn't it?
I don't see the benefit to China on exporting these rare earth materials. They are dirt cheap in comparison with the cost and devastating impact on environment. They should gradually reduce the export, and eventually stop the export all together. Other countries should dig their own rare earth. The overall deposits of rare earth have drop from 43% of the world to 30% in mere 15 years. This is alarming!
Not surprised by this at all. This makes it necessary for tech companies to continue to operate in China. It's a great play on China's part. Look for gold and silver to also surge on this.
China shall impose embargo of these materials to any country that is unfriendly to China (aka economic sanctions, an often abused American strategy). Even for the country China is willing to export to, they shall be restricted only to be used for non-weapon products to keep the world in peace. China shall send out inspectors at the recipient site to enforce that (another American strategy).
Only reason people buy these minerals is because they are cheaper not because they are not available in their own country. The rare earths are really nasty stuff in that radioactive materials are present. Why the US doesn't mine its own, environmentally its nasty.
Another reason American needs to get back to basics and if necessary use some taxpayer money to do it. A rare earths mine in CA was shutdown a few years back due to non-profitabitly; Chinese production killed their margin and markets. For something as strategic as rare earths, I just can't figure out how the government let such a mine close. Maybe subsidies really are sometimes justifiable. Unfortunately politicians only hear "Big government is bad", "the government shouldn't be in business" and "not with my money". Wake up America! Success more than ever depends on hard work, teamwork and some sacrifice.
Its a good thing – China should use this position to slow down military expansion of aggressive countries.
What companies manufacture these rare Earth's?
lol @ hachimada, China is still selling them to other countries. Otheriwse you might have a point. We know your stupid long term plan to take over the world. Get over it. You're living in denial, this is obvious to us. We will fight it every step of the way. Deal with it.
Tough luck, Japan. Seems they still remember Nanjing ...don't mess w China.
China does not have all the REE deposits in the world. Their central Government, starting in the mid 1980s started loaning money (regardless of return) to their REE companies to drive down to cost of production. This in turn put Global producers out of business. The U.S. and Australia have two of the largest REE mines in the world, they just are not profitable due to Chinas illegal subsidies of their own REE mines and producers. In 3-5 years the rest of the world could catch up and bury chinas production capacity, but until then we have a problem. This shows that china has the long term fore sight that the wet often lacks, and they do manipulate markets to their advantage. Fair trade is not fair if they are not reaping the benefit.
There is a reason why rare earths mines like the one in Mountain Pass, Calif. closed – because China could mine and refine these minerals far more cheaply. Yes, that meant job losses for American workers, but those short-term losses can be fixed by retraining those workers to higher-productivity jobs (productivity boosts are what keep the American economy growing, after all). And it also meant that we could buy the goods we have come to love for much less – in this case cell phones and computers.
So before we run off to trade war we should think carefully about the consequences. We should think about what a world without trade would be like (see a picture of it at http://futureofuschinatrade.com/article/imagining-world-without-trade).
Currently rare earth is a non-profitable but extremely dirty business.The profit for exporting the rare earth is only 4%!It's due to the political and economic pressure from japan and America to force chinese do this.Chinese is unwilling to continue do this stupid work anymore which just damaged the enviroment and left no good for chinese.Chinese are angry with the coward government who always bend the knee to the super power's threat.Chinese have the right to do the business they want,not by others' demand.And they are not the slaves of the world economy.They don't want to play as the cheap labor for japan anymore.Japan definitely can still buy rare earth,but with a reasonable price!!You can't steal money and resource from others,right.you can't get your free lunch.Besides It's a strong voice in China,they need to start protect our enviroment for the next generation!!!
It is good for US to get back to basics. Restarting REE mines will help American jobs. US should be able to own honest money by using their own hands.
I am please to see China is learning to back down from its tyrannical monopoly over rare earths. It's time for the world to stop relying on Chinese exports and set up their own source of rare earths.
Also, some of the comments here are copied directly from chinadaily.com.cn comment boards. Beware of CCP paid shills.
In Gold and rare earth markets – china is benefitting from high prices. It is benefitting from a near monopoly of the rare earth market. Price of gold is near the peak price of $1340 per ounce today, in year 2000 it was below $300 per ounce. Thanks to the gold mines in Tibet which China annexed, it is the largest producer of gold in the world today, see http://in.answers.yahoo.com/question/index?qid=20080628014853AAnDDwK . China doesn't need the added benefit of a fixed fraudulent currency rate to boost its economy. The current regime illegally occupied Tibet for its minerals and timber, fixed an unfair Yuan currency rate to gain in trade and in addition practices copyright, patent and other trade violations for economic gain. Japan, USA and UK are not the only nations hurt by China, most nations are suffering. The world's nations should stand up to China.
the whole world condemn China for environmental pollution and now they ask China to dig agian and continue to pollute the environment
very interesting ...
Japan needs to be punished like this way, because it's Nazi mind has not died yet!
Please take a look at this film! The Chinese ship is attacking the Japanese ship!!
http://bit.ly/9GsCKa
Should the World Trade Organization handle this as unfair practice and force a country to give up its own resources for the sake of other countries? Maybe they should look at America dropping the value of its own currency (which is used as a main global currecy) to sneak out of their debts while devastating the economies of other countries.