China Considering Cuts In Rare-Earth Metal Exports

SillySnake sends in a report from the Telegraph on draft plans in China to restrict exports of rare earths. "Beijing is drawing up plans to prohibit or restrict exports of rare earth metals that are produced only in China and play a vital role in cutting edge technology, from hybrid cars and catalytic converters, to superconductors, and precision-guided weapons. A draft report by China's Ministry of Industry and Information Technology has called for a total ban on foreign shipments of terbium, dysprosium, yttrium, thulium, and lutetium. Other metals such as neodymium, europium, cerium, and lanthanum will be restricted to a combined export quota of 35,000 tonnes a year, far below global needs."

Comments

The new "oil"

[MasterOfGoingFaster]

Just what the world economy needs. A single-country "cartel" that will cause prices to greatly rise. This should be interesting to watch.

I guess rare-earth metals are the new "oil".

Re:The new "oil"

[linzeal]

Ok, mister xenophobe.

Why shouldn't China be entitled to use its own resources to build out its own economy? China has a horrible standard of living for the amount of production present in the country and the pollution that goes along with it. I hope they use it all for domestic green energy projects, because frankly they need it more than we do where going "green" is more a luxury than anything. Building green jobs here with our own rare earths is entirely possible considering we have far more known rare earth ore deposits than they do. So what exactly are you complaining about, that we can't rape their country for all the resources? They have a billion people and it is highly unlikely they will ever have the same standard of living as the US in our lifetime but the very least we could do is not bitch and moan every time China does something nice for its own citizens.

You know, I would rather deport people like you than hard working or studying immigrants. Why don't you all go down to the south of the US and secede, this time the rest of us northern folk won't stop you. Well considering there is hardly any natural resources in the south besides coal and oil you can all have your coal power plants and big trucks and you won't need to worry about new-fangled technologies irritating you. You can all live gloriously embittered lives scapegoating the rest of the world for your problems as you walk around yelling in the swamps, marshes and hurricane-prone areas of the gulf states like some sort of swamp curmudgeon. You could yourself America for Americans only or something. Build yourself a Lou Dobbsian wall around your entire country to keep Yankees and Mexicans out. Give all those janitorial, landscaping and construction jobs back to Americans because we all know how much Americans love doing menial labor for low wages without health insurance. Right, mister xenophobe?

Re:Not a Great Analogy

[raddan]

On the other hand, cost drives innovation. As the article stated, it may take several years to bring the old rare-earth mines back into operation. In that time, we either pay more, or use our engineering degrees and come up with workarounds. I have a feeling that the latter may frequently be the case. For instance, if rare-earths are required to manufacture hard disk drives, SSDs (which I assume do not require these metals since they require no magnets) will probably become favorable.

China's move may affect regular people but I suspect not. This is probably more important to you if you're in manufacturing or trade.

Reciprocal regulations

[valinor89]

I think that if they do so they won't mind if we ( as in the other western countries) put prohibitions and restrictions of our own in other product importations. We could revive our cloth, electrodomestic, chemical, (whatever) old industries. It might be a bit expensive at first (mostly for those multinationals ) but then we can be sure of better occupation rates. I's a shame that this is only wishfull thinking...

Re:Reciprocal regulations

[Anonymous Coward]

Yes, please, let's unlearn everything from the Great Depression in the middle of a recession. What could possibly go wrong?

Will somebody in the WTO finally grow a pair

[antifoidulus]

and finally call China out on it's myriad of violations? The US and Europe seem content over bickering about Airbus and Boeing when in actuality, those two companies' violation(if any) are a real drop in the bucket compared to China's insanely flagrant violations. However, the US is an addict hooked on selling China our debt, instead of oh I don't know, not invading a country that had nothing to do with 9/11 we decided it was a much better idea to sell ourselves lock stock and barrel to the Chinese. This is just the tip of the iceberg.

Re:Will somebody in the WTO finally grow a pair

[Ritz_Just_Ritz]

Fat chance. The US and Western Europe are indeed addicted to the unsustainably cheap supply of Chinese credit and cheap labor. We effectively wink at them gobbling up global resources so they can be churned through a cheap labor pool and nonexistent health/safety regimens in order to satiate our desire for a high standard of living at minimal cost. China never had any real intention to abide by the WTO's rules and viewed membership as a national pride issue. Don't hold your breath waiting for China to alter its behavior even if the WTO adds some stank to their toothless regulations.

They are not CONSIDERING; They DID IT

[WindBourne]

China is now refusing to export a number of rare earth elements. These are ones that are currently expensive to get elsewhere. In addition, they HAVE put caps on other ones. But that is not the real problem.

The real issue is that they are running around BUYING UP all the mines in the free world. Basically, they are trying hard to make a monopoly of this. The place to watch is Australia, Canada, and America. America has the largest active RE mines and China made a bid for these last year(US gov said no). They currently are trying to buy 2 start-up mines in Australia. Finally, IIRC, they DID buy a Canadian producer (though I do not recall where mines were located).

The other day I commented about how we should be mining space, to which a fool responded that it was not practical. At that time, I pointed out that long-term countries would try to limit access to various elements/minerals. Sure enough, that day was when I found out about China thinking of limiting REM. The problem is that when items are taken off the market, it means that you limit countries capabilities. That tends to make wars happen. Imagine if another GWB gets into office in say about 2 years and REM is expensive to the west. GWB would go to war over this because CHina is building up their military and will want to stop it before they get too strong. Keep in mind that China is positioning themselves for a first strike, not for a defensive position. If we want to avoid stupid wars, we MUST get into space and locate new elements/minerals esp. REMs. They are the foundation of militaries as well as electrical systems. All of our future motors and many of the advanced electronic boards depend on these.

China is not about playing fair. They are very much in a cold war with the west, whether we like it or now. If we want to prevent a hot war, we will have to prevent them from limiting our access to resources (either by war or by finding new cheap mines) and will have to bring back manufacturing.

Africa

[Shag]

Another big source of uncommon metals is sub-Saharan Africa - for example, something like 80% of the world's supply of either Cobalt or Coltan comes from mines in the Congo. And China has been making big inroads into that region too, in terms of international aid and trade.

There are times that being an officially godless commie state comes in handy, really. US shows up and says "we'll give you aid money as long as you don't promote safe sex, and oh, sorry, our business community is a little too nervous to really trade with you." China shows up and just says "look, we want to do business; you have resources we need."

Unsurprisingly, African governments are talking more to China these days.

short-sighted thinking

[WindBourne]

is EXACTLY what has gotten us to where we are. China is in a cold war with us and it needs to be addressed.

I TRUST that you are kidding about tariffs, yes? They do not work. The issue is that China was given MFN and into WTO by promising to open their borders and to free their money. All good. Problem is that China has not LIVED up to their word. They still have barriers up and most of all, the money is not traded freely. It is in a "basket" that is controlled by their gov. In addition, they allow pollution (co2 and other ) to be emitted in large amounts to give an even larger boost to low costs. Our energy bill is going to be a disaster and will encourage China,India,Mexico, etc to pollute more to take more jobs.

So, here is my solution:

1. Pollution is a serious issue, but so are economic issues. Kill the new energy bill before it gets implemented. Instead put in a TRUE cap/tax. We need to put in a cap on our CO2, and then put in a tax on ALL GOODS (local and imported). It should be based on the pollution that comes from the areas that the good was made from. That means that each country has a sliding scale based on CO2, and ideally the pollutions such as SO2, Mercury, etc. To implement this all at once would hurt the world. Instead, create a max of say 2-3% and than slowly raise that several percent each year. That gives each nation the opportunity to change (including America).
2. Drop the MFN for all nations. Nearly all the countries that are part of that were for political reasons only. That needs to be stopped. Instead, create a new MFN and set up the conditions in which ALL NATIONS that meet it would get it. It should be a limited set of conditions.
   • freely traded money (EUdollar is freely traded; Yuens -> dollar is fixed).
   • Free trade. Not sure exactly HOW free, but most if not all goods should be allowed to move back and forth. Exceptions should be made for certain goods. For example, NAFTA was overall good. It has helped Mexico and Canada.
   • A minimum standard of an environmental condition. That would prevent countries from subsidizing the goods by degrading the world. Personally, I would prefer Canada as minimum. MUCH cleaner than most. We would probably just use ours though.
   • A minimum wage and labor condition.
   • A minimum education condition (such as requiring all children in school up to a certain age), etc.

   If we do the above, then there will be no real need for free trade acts. What is really needed is to make certain that we avoid exceptions. There are a number of countries that we allow to have one-way trade with us and do little to nothing to help those countries.

If the above is done by the west, it would bring up conditions all over the world. EU has talked about doing Free Trade agreements with Latin America, but they want to use it to push better conditions for the citizens. I have to say that it is not a bad idea, but I think the above is even better.