Currently China produces about 97% of the global demand for “rare earth elements” used industrially but China has only about 36% of the world’s resources. In the last few months the Chinese have created a “crisis” both by throttling exports and by sharp price increases which have alarmed the auto and electronics industry. Japanese industry has been particularly disturbed. But it would seem that China had very clear diplomatic goals for their trade actions.
The 17 “rare earth elements” are not rare at all.
Rare Earth Elements: graphic ggg.gl
From Wikipedia: http://en.wikipedia.org/wiki/Rare_earth_element
Despite their name, rare earth elements (with the exception of the highly unstable promethium) are relatively plentiful in the Earth’s crust, with cerium being the 25th most abundant element at 68 parts per million (similar to copper). However, because of their geochemical properties, rare earth elements are not often found in concentrated and economically exploitable forms. Instead, they are usually found in rare earth minerals. It was the very scarcity of these minerals (previously called “earths”) that led to the term “rare earth”. The first such mineral discovered was gadolinite, acompound of cerium, yttrium, iron, silicon and other elements. This mineral was extracted from a mine in the village of Ytterby, Sweden; many of the rare earth elements bear names derived from this location.
A table listing the seventeen rare earth elements, their atomic number and symbol, the etymology of their names, and their main usages is provided here. Some of the rare earths are named for the scientists who discovered or elucidated their elemental properties, and for their geographical discovery.
||from Latin Scandia (Scandinavia), where the first rare earth ore was discovered.
||Light Aluminium-scandium alloy for aerospace components, additive in Mercury-vapor lamps.
||for the village of Ytterby, Sweden, where the first rare earth ore was discovered.
||Yttrium-aluminum garnet (YAG) laser, YBCO high-temperature superconductors, yttrium iron garnet (YIG) microwave filters.
||from the Greek “lanthanein”, meaningto be hidden.
||High refractive index glass, flint, hydrogen storage, battery-electrodes, camera lenses, fluid catalytic cracking catalyst for oil refineries
||for the dwarf planet Ceres.
||Chemical oxidizing agent, polishing powder, yellow colors in glass and ceramics, catalyst for self-cleaning ovens, fluid catalytic cracking catalyst for oil refineries
||from the Greek “prasios”, meaningleek-green, and “didymos”, meaningtwin.
||Rare-earth magnets, lasers, core material for carbon arc lighting, colourant in glasses andenamels, additive in Didymium glass used in welding goggles, ferrocerium firesteel (flint) products.
||from the Greek “neos”, meaning new, and “didymos”, meaning twin.
||Rare-earth magnets, lasers, violet colors in glass and ceramics, ceramic capacitors
||for the Titan Prometheus, who brought fire to mortals.
||for Vasili Samarsky-Bykhovets, who discovered the rare earth oresamarskite.
||Rare-earth magnets, lasers, neutron capture, masers
||for the continent of Europe.
||Red and blue phosphors, lasers, mercury-vapor lamps
||for Johan Gadolin (1760–1852), to honor his investigation of rare earths.
||Rare-earth magnets, high refractive index glass or garnets, lasers, x-ray tubes, computer memories, neutron capture
||for the village of Ytterby, Sweden.
||Green phosphors, lasers, fluorescent lamps
||from the Greek “dysprositos”, meaning hard to get.
||Rare-earth magnets, lasers
||for Stockholm (in Latin, “Holmia”), native city of one of its discoverers.
||for the village of Ytterby, Sweden.
||Lasers, vanadium steel
||for the mythological northern land ofThule.
||Portable X-ray machines
||for the village of Ytterby, Sweden.
||Infrared lasers, chemical reducing agent
||for Lutetia, the city which later became Paris.
||PET Scan detectors, high refractive index glass
As long as China’s own industry was not sufficiently developed to use these materials there was no crisis and production from resources in many other countries (rare earth elements are quite plentiful around the globe and not “rare” at all) were discontinued in the face of Chinese competition. The current crisis comes about because Chinese industry is now sufficiently advanced to make use of these elements and its industrial volume is large enough to absorb a large part of the production. This allowed China to use of reduction of exports and increase of prices to send strong diplomatic signals. Firstly to counter the US pressure to revalue the Yuan and second to warn Japan regarding their territorial dispute.
But this “crisis” can only be short-lived. The price increase has already led to production of rare earth elements being restarted in the US and many other countries are now planning to start production (Sweden, India, Vietnam and countries in Central Asia for example). China is no doubt well aware that their manufactured “rare earth elements” crisis will only accelerate the production of these elements from alternate sources. But what it shows is that China has the economic muscle and the willingness to now use “trade wars” as a weapon in diplomacy. But what is also a new development is the concerted response from many countries in acting together to find alternate sources and counter the Chinese might.
That Japan feels particularly vulnerable is to be expected since it does not have its own resources and is a major user. The Asahi Shimbun writes:
One reason for China’s dominance in production is the cheap cost of labor. But the country also has an advantage because deposits there can be extracted through relatively rough methods. In southern China, the weathering of a particular type of granite containing large amounts of rare earths has progressed to the right degree. Unwanted substances have been washed away in the rain, leaving soil with high concentrations of rare earth metals exposed on the surface.
“Erosion proceeds quickly in places that are warm and have a high rainfall, but if there is too much rain, erosion proceeds too quickly,” said Mitsuya Hirokawa of Japan Oil, Gas and Metals National Corp. “The necessary conditions are the existence of granite that contain lots of rare earths and the right amount of rainfall.” Southern China fulfills these conditions.
Japan has the right type of granite, but it has not eroded at the proper pace. But environmental concerns are arising from the cheaper method of extraction in China. In normal mines, rare earths are extracted by chemically processing ore that has already been removed from the ground. But in the method used in southern China, the mine itself becomes a processing factory. Acidic liquid is poured on the ground, and the dissolved rare earths are recovered from the liquid that oozes out. If the toxic liquid leaks into rivers, it could have serious consequences for the environment. “There are paddy fields in the vicinity, and there are concerns about the impact on human health,” said a researcher who observed the procedure in southern China.
This is the context under which China cites environmental concerns as the reason for restricting exports of rare earth metals. But this cheaper method of extraction is one reason why production is concentrated in China. Many mines in the United States and elsewhere could not afford to continue operating and were closed down.
Apparently, similar “convenient” deposits exist in Vietnam. Studies are under way, but production there has not yet started.
The Wall Street Journal analyses the Chinese use of trade flows as a tool of diplomacy:
Beijing’s decision earlier this year to stop shipments of rare earth minerals to Japan apparently as part of a territorial dispute raised a lot of concerns about the strategic implications of China’s growing economic strength. And well it should. Up to now, Beijing has worked hard to separate economics from politics on the world stage as part of a strategy to minimize global unease with its rise. That it is now willing to use an economic lever in a political matter suggests that approach is changing in ways that could cause trouble for the rest of the world and for China itself……..
……….Before now, trading partners were willing to take the temporary hit to trade, since they knew the episode would quickly blow over. This time, though, all major trading partners are seriously contemplating alternatives to Chinese markets in rare earth supplies. Japan, naturally, has been most active in looking for alternative sources, signing agreements with Vietnam and Australia to develop new mines or renewing production in existing mines.