China Now Halting Shipments of Rare Earth Minerals To US

Summary:

Following previous news of China blocking shipments of rare earth elements to Japan, China is now also preventing shipments to the U.S. in response to recent US promises to investigate China's green technology trade practices.

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http://www.livescience.com/technology/etc/101019-china-halts-shipments-tech-crucial-minerals.html

Submitted by Jeremy Hsu

A nasty trade dispute appears to have prompted Chinese customs officials to block shipments of rare earth minerals to the U.S.

The move underscores a deepening U.S. vulnerability because of its dependence upon China for tech-crucial rare earth minerals (also known as rare earth elements). Small but significant amounts of the minerals go into creating everything from PCs and cellphones to wind turbines and hybrid cars, as well as U.S. military technologies such as missile guidance systems.

This latest news came from three rare earth industry officials cited by the New York Times. The officials spoke on the condition of anonymity for fear of backlash from China.

China currently controls about 97 percent of rare earth production, and has the only facilities capable of processing rare earth minerals after they have been mined. Rare earth minerals are not exactly rare, but the mining and refining processes can be costly and time-consuming.

Official Chinese plans have called for China to reduce rare earth mineral exports to meet its own rising industrial demands. That already indicated to many industry experts that countries such as the U.S. would have to find alternate supplies soon.

U.S. rare earth companies have begun looking to reopen old mines and search for new deposits, but industry experts say that relaunching an independent U.S. supply chain could take 15 years.

The latest Chinese action follows a similar move last month, when China halted shipments to Japan during a political dispute over Japan's arrest of Chinese fishermen. Among the affected Japanese companies was Toyota, maker of the popular Prius hybrid cars which incorporate the rare earth element neodymium, among others.

But Japanese companies such as Toyota are believed to keep larger stockpiles of rare earth minerals compared to most Western companies, according to the New York Times. The newspaper added that China's action comes after American officials announced an investigation last Friday into whether China was violating international trade rules by subsidizing its clean energy industries.

Industry experts have suggested that China hopes to attract Western companies to set up shop near its rare earth mineral supply. China may also be aiming to export finished products which use rare earth minerals, rather than just sell the minerals.

China has openly denied blocking any rare earth mineral shipments. But its recent actions may very well alarm other countries enough so that they will fast-track their own rare earth industries.