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Is China a rare earth bully?
This topic has been highlight by szh at 2010-10-6 11:47.
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1# > A < Posted 2010-10-6 11:26 Only show this user's posts
Is China a rare earth bully?
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2010-10-6 11:33



Japan will cooperate in promoting projects to develop rare-earth minerals in Mongolia as it seeks to diversify sources of materials needed for high-tech products.


Japanese Prime Minister Naoto Kan and Mongolian Prime Minister Sukhbaatar Batbold agreed on such cooperation during a meeting in Tokyo on Oct. 2, Japan's foreign ministry said in a release.


The move comes as Japan looks to broaden sources of rare-earth minerals after some Japanese companies late last month reported delays in receiving shipments from China due to more stringent customs checks by Chinese authorities. China has denied any interference, and later Japanese commerce minister confirmed China didn't curb rare earth exports to Japan, Reuters reported.


Japan depends on China for 96% of its rare-earth minerals, while China controls more than 90% of the world's output.


In contrast to the high share in market, now China holds only about a third of global reserves for rare earths. In 2009, rare earths were not mined in the United States while it owns 13% of global rare earth resources.


rare earth.jpg (51.79 KB)
2010-10-6 11:26

(Source: U.S. Geological Survey, Mineral Commodity Summaries)


Rare earth elements are essential to a plethora of modern high-tech stuff including the new green technologies. Despite it’s for sure that global output of rare earth minerals will decline amid China starts to regulate the production, the high-tech manufacturers will not immediately panic because stockpiling should guarantee enough supply.


The major rare earth consumers are always blaming China's stranglehold threatens the world's green revolution. However, rare earths supply in fact exceeds demand in these years. For example, the world rare earth minerals production was 124, 000 tons but the consumption was 90,000 tons in 2009. The worries about China’s moves on exports mainly come from the consideration of the probable price hike.


China has been supplying cheap rare earths and it's the right time to change the status quo. Shen Jiru, researcher of Chinese Academy of Social Sciences (CASS), said it’s irrational that the majority of countries with rare earth reserves contribute low even zero to global supply (As the charter shows above). Bill Chameides, environment professor of Duke University, believes America’s reserves are sufficient to meet domestic needs. Why does China provide rare earth at low price even if it has become the dominant rare earth player in the world?


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2010-10-6 11:45

farmland 2.jpg (42.8 KB)
2010-10-6 11:45

The rare earth mining cause serious water loss and soil erosion. The land is not suitable for farming any more.


The mines in China use low-level techniques to exploit rare earths by and large, which saves production cost economically but severely pollutes the water resource and farmlands near the mines. Meanwhile Chinese producers suffer from the Western countries blockade on advanced mineral processing technologies.

Moreover, there is no uniform pricing mechanism in China, therefore Chinese rare earths suppliers adopt low-price policy to compete for market share as much as possible.


The exhaustion of China's rare earths would be a major blow to the world's green energy industry, so China must regulate to curb excessive and disorderly mining of the non-renewable resource. The complainers need to rethink: who cares about China's sustainable development and what's the real threat to world's rare earth supply?
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