China has cut off some shipments of rare earth minerals to the United States and Europe, according to anonymous industry sources cited by the New York Times.
The Trumpet warned last month that China’s control of over 95 percent of the world’s rare earth production gave it great power. Earlier this month, we reported that it used rare earth minerals to force Japan into a humiliating surrender in a territorial dispute.
Now the U.S. may be the target. On October 18, China expanded its rare earth embargo beyond Japan by imposing broader restrictions on Europe and the U.S., according to the Times.
As it did with Japan, China is denying that there is an embargo. The spokesman for the Chinese Embassy in Washington claimed his country is just implementing tougher environmental standards on the rare earth mining industry.
“Companies I’ve talked to say there’s no ban on rare earth exports, however materials are still being held up in customs and shipments are delayed,” said the president of Washington-based J.A. Green & Company llc, Jeff Green. “Many believe rare earth quotas for the second half of 2010 are exhausted, leaving materials unavailable for sale.”
Whether or not China is implementing a ban, the situation shows the power rare earths give China, and how vulnerable the rest of the world is.
In July, China restricted rare earth export quotas by 72 percent, saying it needed to conserve its supply of the minerals. Since then the prices for rare earth minerals have shot up from 300 to 1,500 percent.
One nation especially concerned about the rare earth situation is Germany. On October 19, German Economics Minister Rainer Brüderle said the German government would focus on building partnerships with rare-earth-producing nations, as well as invest in rare earth recycling.
Germany industry officials said both the government and German industry were appealing to the European Commission and the World Trade Organization (wto) about the situation. Germany’s high-tech export-driven economy relies heavily on rare earths.
“Considering the raw materials policy of a country such as China, it’s urgently necessary to make capital available among European partners in order to secure long-term supplies,” German Chancellor Angela Merkel told the lobby group Germany’s Committee on Eastern European Economic Relations last week. “That’s not only a reference to natural gas and oil but goes far beyond that to include minerals.”
Berlin will be hosting a special conference on the rare earth situation next week, with high-profile speakers from around the world. The director general of the wto, Pascal Lamy, will be speaking, as well as Brüderle.