Common politics muddy waters in rare earth discovery
After a Japanese researchers found rare earths near Hawaii, some are questioning the timing of the announcement
A bastnaesite mineral containing rare earth is pictured at a laboratory of Yasuhiro Kato, an associate professor of earth science at the University of Tokyo, July 5, 2011. Vast deposits of rare earth minerals, crucial in making high-tech electronics products, have been found on the floor of the Pacific Ocean and can be readily extracted, Japanese scientists said on Monday.
Yuriko Nakao / Reuters
By Peter Guest, CNBC.com
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Question marks over the timing of an announcement of the discovery significant deposits of rare earth minerals on the Pacific sea floor—and over the supposed size of the reserves—have highlighted the increasing role of international politics in the supply of the elements, critical for high technology and defense systems.
Researchers from the Japanese Agency for Marine-Earth Science and Technology found high concentrations of rare earths in mud on the seabed near Hawaii, according to a paper in Nature Geoscience, an academic journal.
"We estimate that an area of just one square kilometer, surrounding one of the sampling sites, could provide one fifth of the current annual world consumption of these elements," the report's authors wrote.
News of the find seemed to offer comfort to countries concerned by the monopoly held by China over global rare earth supplies.
China leads the world in terms of production and refining of the minerals—according to the US Government Accountability Office, the country mines 97 percent of the ore currently in production.
"We're not only looking at what the reserves are underground, but also the whole supply chain, so China's dominance comes from not only what it has, its concentration and purity levels, but then down the line they also dominate on the refinement of oxides and also the production of alloys," Karlin Younger, an analyst at political risk consultancy Control Risks, told CNBC.com.
Minerals like dysprosium, tantalum and yttrium are used in the manufacture of cellphones, tablet computers, solar panels and high technology weapons systems. The dominant position of China in the market had raised some concerns that not only would the country's solar industry and technology manufacturers have an advantage, but Beijing would be able to leverage its position for strategic gain by controlling supplies of raw materials for US military hardware.
At the end of 2010, Beijing cut its export quotas for rare earths by 40 percent, causing concern both in the US and in Japan, the largest importer of rare earths, whose high technology industry is a major part of its economy.
In September 2010, during a dispute with Japan over the detention of a Chinese fishing trawler captain in a contested area of the South China Sea, Beijing reportedly blocked exports of rare earths. Although to admit this measure would have attracted censure from the World Trade Organization (WTO), analysts who spoke to CNBC.com said that a de facto export block did appear to have been in effect until the captain, Zhan Qixiong, was released.
In January, US president Barack Obama signed a defense spending authorization targeting security of supply of rare earth minerals.
The US Geological Survey estimates that there are around 110 million metric tons of rare earth reserves on land, half of which are in China. The US has around 13 million tons of reserves.
