More Effects of Rare Earths Embargo
Well, it took long enough… but it looks as if the world is starting to wake up to the reality of rare earths.
As Addison Wiggin told you on Wednesday in “The Truth Behind the Chinese Rare Earths Embargo” it appears China has cut off rare earth exports to the United States, after doing the same to Japan last month. China controls up to 97% of world production, so this is a big deal for the makers of everything from mobile phones to missile launchers.
Next week, economic and government bigwigs will convene in Berlin to figure out what to do. The head of the World Trade Organization will be there. So will a senior vice president from the US Chamber of Commerce and the European Union’s development commissioner.
Clearly, they feel there’s no time to waste. Here’s a roundup of fast-moving developments from just the last 36 hours…
Japan’s vice minister of the economy, trade, and industry said today his nation’s stockpile of rare earths is good for only another six months – at best.
“With recycling, imports from sources other than China, and cooperation among (Japanese) companies, it (the existing stock) seems to last until March or April,” says Yoshikatsu Nakayama.
Japan and South Korea together accounted for 20% of the world’s rare earth consumption last year. Makers of metal alloys, magnets, catalytic converters and polishing compounds could be hit hard. Toyota can’t make the batteries for its hybrid Prius without rare earths.
Germany is not yet the target of an export ban… But just yesterday, its leaders took steps to secure future supplies. They approved a plan to develop partnerships with other nations that produce rare earths, like Australia, the United States and Canada. They also agreed to invest in rare earth recycling.
“Considering the raw materials policy of a country such as China,” said German chancellor Angela Merkel last week, “it’s urgently necessary to make capital available among European partners in order to secure long-term supplies.”
Rare earths are a big deal in Europe too; automakers would face a big squeeze without rare earths to put in their catalytic converters. Ditto for the makers of solar panels; “green energy” is big business in Germany.
China, for its part, is sending out mixed signals. On Tuesday, an unnamed official in the commerce ministry told China Daily that worldwide rare earth exports would be cut 30% next year (on top of a 40% cut over the summer).
Yesterday, the ministry issued a statement saying, “The report is completely false.”
The ministry remains silent on whether exports have been cut off to either Japan or the United States. Glad we’ve got all that cleared up.
“It hasn’t sunk in to the Western elite that they can’t tell China what to do,” says Jack Lifton, director of Technology Metals Research, and one of only a handful of experts who know the rare earth business inside out.
Germany’s economics minister has labeled China’s export curbs an “unfriendly act,” but “I don’t see what my right is to someone else’s property,” says Lifton. “They are on Chinese soil. The Chinese are saying, ‘You have the resources. Go mine them and use them for yourselves.’”