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United States uneasy as China further cuts rare earth exports

December 29, 2010

Our modern life style is dependent upon a small group of elements called rare earth minerals. They are found in everything from handhelds to wind turbines. Cause for concern now that China is reducing exports.

https://p.dw.com/p/Ql4M
Workers at the Etrema Products Inc. manufacture Whispering Windows devices in Ames, Iowa
Many Western companies are dependent on rare earths from ChinaImage: AP

After the Chinese government decided to reduce exports of its precious rare earth elements on international markets by 35 percent for the first half of 2011, the shares of Chinese producers have reacted with increases. Meanwhile world markets are expected to react next year as modern technologies such as flat screen televisions and monitors and green technologies such as fluorescent light bulbs and hybrid cars require the minerals.

China produces over 95 percent of the world’s rare earths and thus has a stronghold on the market. According to sources in Japanese industry, Beijing temporarily cut exports to Japan after a territorial row earlier this year. The United States has advised China not to use its control over the coveted raw materials as a "weapon" and might take action at the World Trade Organization.

The restriction of rare earths could harm high-tech industries
The restriction of rare earths could harm high-tech industriesImage: AP

Looking for alternatives

While producers are now looking for alternative sources outside of China, high-tech company Sony has said it will look for ways to cut its use of rare earths.

At present, China accounts for approximately 75 percent of the global demand for rare earths; the rest is used in Japan, North America and Europe. By 2015 the demand for the elements is expected to increase by more than 50 percent from 110,000 tons to 250,000 tons per year.

Author: Sarah Berning (AFP, Reuters)
Editor: Thomas Baerthlein

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