Japan and China Continue to Be the Focus of Rare Earth Metals Activity

Copyright (c) 2012 Alison Withers

The Japanese Government has announced that it intends source half its needs for Rare Earth Metals from outside China by the middle of 2013.

The trade minister has told the Japanese Parliament that the intention was to further diversify sources of suppliers, support technological development to cut the amount used and to promote recycling.

Now Japan has agreements to source 4,100 tonnes of rare earth from India, 400 tonnes from Kazakhstan and 9,000 tonnes from Australia.

China has been supplying 90% of Japan's needs, as a major manufacturer of the variety of consumer electronic goods and hybrid cars that need to use rare earth metals.

Throughout 2012, however, China's activities had prompted Japan, among other manufacturing countries, to look for alternative supplies.

Among these developments are China's decision in March 2012 to reduce its export quotas for the rare minerals, which prompted complaints to and a formal investigation by the World Trade Organisation.

Then the long running dispute over ownership of islands in the East China Sea between China and Japan flared up again and this remains a major issue between the two.

In addition in October and November 2012, Chinese companies temporarily halted production of both heavy and light rare earth metals at five of its main producers, it is believed in an effort to stabilise prices which have fluctuated dramatically throughout 2011 and 2012. The Chinese government has also been continuing its efforts to end illegal production and has shut down several such operations in different parts of the country.

Japan and India have been involved in a joint project to refine rare earth minerals in India in Andhra Pradesh.

A steady supply of the minerals at stable prices is plainly important to manufacturers all over the world and throughout 2012 countries have increasingly sought to source supplies from outside China, which had previously supplied 95% of the world's needs.

Nevertheless, China's near-monopoly on supply may be eroding very quickly as more and more sources of supply have been identified in other parts of the world resulting in joint arrangements between a number of states. Ongoing demand for rare earth metals has also prompted mining companies that had previously suspended processing because they could not compete with China's low prices, to consider resuming production.

Japan has been the most active country in many of these moves. Japan has led the way in many of these moves, along with the United States. How much longer China's monopoly of supply will be able to continue remains to be seen.

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