Japan, U.S., EU take rare earth dispute with China to WTO

WasteTimeOn (WTO), prices will go further up and even if decision goes against China, it will hardly change her stance. Why not engage in negotitations? we know US is not good at it but her partner Japan can play a bigger role.

And what would this achieve? Higher prices? Seeing as the vast majority of the materials come from China I can't see where they could find a large enough alternative.

So the US, EU, and Japan dont like the fact that China is restricting the export of minerals that are found, mined and processed in China. Like the US or others have never in their past banned the export of a product to another country. These minerals are found in China so they are Chinese property to do as they please with just as something mined in the US belongs to the US etc etc.

Cletus, that may be so; but such actions clearly violate WTO rules. If China wants to enjoy playing in the global economic sandbox, China is going to have to learn to share her toys. That is simply what WTO rules intend, and they cannot be selectively ignored.

So the Chinese control the market for Rare Earth minerals. Ifthe U.S., Japan and Europe controled them, do you think the Chinese would complain...

I can see this happening with water & oil in the future, as a Canuck Cda has already surrendered control of its oil & water wrt the US & now that a north south pipeline has been axed, & a possible route to Cda west coast some yanks are freaking because that will allow Cda to sell to MORE customers.............

The future is going to be shaky & worse at the rate we are all going it messed up!

Processing rare earth minerals is a very dirty business and to a certain extent processing them in developed nations has pretty much been legislated out by environmental concerns. So, that dirty business went to China. Where they now control it.

“We want our companies building those products right here in America, but to do that, American manufacturers need to have access to rare earth materials, which China supplies,” Obama said Tuesday.

The US could mine as much rare earths as China, but they don't want to because it causes enviromental hazards.

It's always interesting to watch the hypocrisy of protectionism. A and B country have the right to control exports and imports, but when it's something A and B desperately need, C country has no rights to do the same thing.... or so A and B think.

Lynas Corp. and Northern Minerals in Australia mine rare earths. Molycorp, Inc. in the U.S. also does (possible investment opportunity here for individuals purchasing stock). However, certain rare earths are only found in certain locations. The dysprosium and neodymium used in magnets for hybrid car motors are found in limited quantities in the U.S. and Australia. However, it takes years for a mine's production to fully come on line. China is already being successful at luring some foreign manufacturers to build products within China due to the rising costs of rare earths. One interesting thing is that some of China's rare earth deposits seem to extend into Vietnam. But again, production startup takes years.

@hemeln

Actually, the US and other countries used to mine and produce rare earths, but China has exported them at very low prices that other countries were forced to shut down operations.

But since China's announcement, some rare earth mining areas are planned to be re-opened.

Thing is, this could be another tactic by China ... limiting exports, causing international prices to increase, and when other countries' rare earth mining and processing are ready to go, rectract the export limit again.

If you own a commodity and you want a fair price, what do you do? Hold out until everybody is willing to pay what you wish. Since China have one of the few sources on rare earth, I can see why it would restrict how much of that stuff going out of the country too, especially since it can be used in making suffocated technology (Armaments) I feel they are concerned it might come back and bit them in the horse for want of a better word.

t's always interesting to watch the hypocrisy of protectionism. A and B country have the right to control exports and imports, but when it's something A and B desperately need, C country has no rights to do the same thing.... or so A and B think.

This

The west would prefer to sit on it's buried reserves and pollute China.

Indeed, hypocrisy at its best. Unfortunately, we still have along way to go as a human race until we get rid of these ridiculous protectionism policies worldwide.

If China wants to enjoy playing in the global economic sandbox, China is going to have to learn to share her toys. That is simply what WTO rules intend, and they cannot be selectively ignored.

Spot on!

Cannot be put any simpler, if you want a seat at the table, you have to play by the house rules... PERIOD... This goes for every country, not just China.

Cletus: So the US, EU, and Japan dont like the fact that China is restricting the export of minerals that are found, mined and processed in China. Like the US or others have never in their past banned the export of a product to another country. These minerals are found in China so they are Chinese property to do as they please with just as something mined in the US belongs to the US etc etc.

Sweet. So you're saying if the US government had a policy where they made one price for US companies and another higher price for foreign companies, you'd be behind it.

When do we get started?

Japan's complaint to China's rare earth sale is understandable because Japan does not have the resource. USA complaint? What for ? You america has fourth largest land in the world and plenty resources then why you do not dig them out and process them? Oil and gas are another example. USA has large resources of oil and gas but it does not drill them out but buy from other countries (this is why so many wars in oil rich countries then and now). Why, is that because you, USA, want to reserve these resources for your later generations? Clever ha? Alaska has a lot of mineral, oil and gas. Please go there and dig them out for yourself. China's resource is for Chinese and those do not have any resources, not for you rich and greedy america.

There are too many ways for China to get around this, e.g. by claiming a "national security" exemption. Or they could close down mines on environmental grounds until production equals their domestic demand, leaving nothing left to export etc. It would be better to invest in alternatives to rare earths as I expect the result of this will be reduced exports from China.

How can you force China to sell something if it does not want to do so?

What if Japan EU and the US insisted China sell inmates organs....would they have to do it? NO!

Start digging your own rare earths and start digging fast, because it looks like we are in a pickle.

This complaint is about as useful as waving a wet sausage.

Basic Supply vs Demand. The same goes for crude oil. And hypocrisy by the usual players, none of which actually adhere to true Free Market principles.

STOP. USA and Japan cannot tell China or any other country how to manage their natural resources, not. What if I tell Japan what they have to do and how they have to do it? LOL this complaints are non sense.

Blame the companies who went for the cheaper Chinese prices, instead of supporting other extraction sites, knowing the risks of not diversifying, and now that decision is biting them in the butt (save money now, pay more later). And now they're whining for access to something they have less control over? Serves them right; have them pay extra.

Hizo and Lost are right, just like I am.

That is a strange court case. They want to force China to sell more rare earths? How can you force anybody to sell something?

The dirty little secret here is of course that these "rare earths" are not all that rare. They can be extracted everywhere, but at a huge environmental cost. So Europeans want European manufacturers to build all the "clean" looking gadgets like computers and "green" products like windmills and hybrid cars, while the environmental disaster that enables their manufacture stays in China.

Hypocrits. In particular the "green" activists should insist that the rare earths needed for the supermagnets used in the oh-so-environmental windmills and hybrid cars are manufactured in their politically correct backyards. Hypocrits.

Hehehehe Creating WTO is on payback mode. Wonder whose creation was this. If China restricting export of that rare metal, so be it. Restrict imports from China too. Most of the countries survived many many moons ago without imports from China why can't USA and others are cry babies now.

Watch out there is another brewing org TPP.

There are other sources of rare earths. Once the price goes up enough those will be used. Why all the hysteria. Must be an election year...

I don't think anyone here sees the bigger picture. China has access to rare earth elements and materials. Does anyone know geography here? Afghanistan has even more rare-earth resources. See: http://www.upi.com/Business_News/Energy-Resources/2011/09/15/Afghanistan-yields-rare-earth-elements/UPI-95171316090675/ That is one of the primary reasons we are there. That way the U.S. and other countries do not have to worry about China restricting exports of rare earth elements and materials.

peanut666:

" Does anyone know geography here? Afghanistan has even more rare-earth resources "

Sorry to say, but that conspiracy theory is complete nonsense. Nobody in his right mind is going to set up extensive mining operations in Afghanistan. To start with, check out wonderful workforce there.

Fact is, you can mine "rare earths" everywhere, if you are willing to accept the environmental destruction, or pay the huge cost to repair the same.

China is the largest rare earths producer simply because it has no qualms turning large tracts of its land into a nightmarish environmental diaster zone, and population willing to work there. Nothing more to that.

As reported, the rare earths is critical to the making of high-tech products from iPods to missiles, on the other side, would US be willing to export those products to China?

US is selfish that she always engage in a strategy in using up other countries' resources first. US has her own oil and rare earths, but she just uses the imports from other and pay with the USD, then US just let the dollar goes down.

WilliB:

Sorry to say, but that conspiracy theory is complete nonsense. Nobody in his right mind is going to set up extensive mining operations in Afghanistan. To start with, check out wonderful workforce there.

It's not a conspiracy. Our government is already surveying the area for setting up extraction. Don't believe me? See: http://www.livescience.com/16315-rare-earth-elements-afghanistan.html

The article is from Scientific American. Unless you think that is some conspiracy theory magazine.

China is the largest rare earth material producer because they don't care about environmental destruction and have a large uneducated workforce to do the mining. Currently the WTO is trying to level the economic playing field because China has a monopoly, that is of course till the west starts mining Afghanistan.

peanut666 provided very useful info, thanks

Many countries possess rare earth reserves ( albeit unexploited due to serious pollutions involved in extracting via the massive use of acids ).. Main reasons for the strong objection from inhabitants nearby an Australian poroposed project of treating rare earth mined in Australia.

Rare earths are needed in high tech critical devices -- Japan, Europeans & Americans self imposed in an organized manner, export bans of hi tech devices to China.. Now these same countries are pushing hard to force The Chinese in rare earth export ( at low prices & massive quantities they think reasonable ) regardless of pollution ( of course in other countries ) & with the ongoing export bans imposed on hi tech items -- vivid example of selfishness I am afraid !

Correction "Main reasons for the strong objection from inhabitants nearby an Australian poroposed project of treating rare earth mined in Australia."

Should be read as

Main reasons for the strong objection from inhabitants nearby an MALAYSIAN site for a project of treating rare earth mined in Australia.

Sorry for the mistyping

It's not avoidable that China tends to monopolize some of rare metals because China has been already playing a key role in making consumer electronics.... and probably in making cars in near future. Because of low labor cost, developed countries has been outsourcing them to China from the past. Accordingly, looking at the situation that most of consumer electronics product, using certain rare metals, are being made in China.It's the fact. If some US, EU and JPN companies decide to transfer factories in China to another countries, it should bring some loss to them. Not beneficial. Furthermore, it'll take a time until getting up and running.