Monday, July 4, 2011

China's rare earth mineral strangle hold is lessened

"Huge rare earth deposits found in Pacific: Japan experts"


El Tan

July 4th, 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.

"The deposits have a heavy concentration of rare earths. Just one square kilometer (0.4 square mile) of deposits will be able to provide one-fifth of the current global annual consumption," said Yasuhiro Kato, an associate professor of earth science at the University of Tokyo.

The discovery was made by a team led by Kato and including researchers from the Japan Agency for Marine-Earth Science and Technology.

They found the minerals in sea mud extracted from depths of 3,500 to 6,000 meters (11,500-20,000 ft) below the ocean surface at 78 locations. One-third of the sites yielded rich contents of rare earths and the metal yttrium, Kato said in a telephone interview.

The deposits are in international waters in an area stretching east and west of Hawaii, as well as east of Tahiti in French Polynesia, he said.

He estimated rare earths contained in the deposits amounted to 80 to 100 billion metric tons, compared to global reserves currently confirmed by the U.S. Geological Survey of just 110 million tonnes that have been found mainly in China, Russia and other former Soviet countries, and the United States.

Details of the discovery were published on Monday in the online version of British journal Nature Geoscience.

The level of uranium and thorium -- radioactive ingredients that are usually contained in such deposits that can pose environmental hazards -- was found to be one-fifth of those in deposits on land, Kato said.

A chronic shortage of rare earths, vital for making a range of high-technology electronics, magnets and batteries, has encouraged mining projects for them in recent years.

China, which accounts for 97 percent of global rare earth supplies, has been tightening trade in the strategic metals, sparking an explosion in prices.

Japan, which accounts for a third of global demand, has been stung badly, and has been looking to diversify its supply sources, particularly of heavy rare earths such as dysprosium used in magnets.

Kato said the sea mud was especially rich in heavier rare earths such as gadolinium, lutetium, terbium and dysprosium.

"These are used to manufacture flat-screen TVs, LED (light-emitting diode) valves, and hybrid cars," he said.

Extracting the deposits requires pumping up material from the ocean floor. "Sea mud can be brought up to ships and we can extract rare earths right there using simple acid leaching," he said.

"Using diluted acid, the process is fast, and within a few hours we can extract 80-90 percent of rare earths from the mud."

The team found that sites close to Hawaii and Tahiti were especially rich in rare earths, he said.

He gave no estimate of when extraction of the materials from the seabed might start.

"Rare Earths Discovery Won't Solve U.S.-China Tensions"


Max Fisher

JUky 5th, 2011

The Atlantic

As long as China's relationship to the developed world is built on competition, it will make little difference whether it maintains control over these valuable resources.

Japanese scientists say they have discovered 100 billion tons of rare earth minerals, about 1,000 times the rest of the known global supply, on the Pacific floor. The minerals, of which China is by far the world's dominant producer, are crucial for high tech consumer and military products, and thus for Japanese and U.S. security and economic well-being. China has used its near-monopoly on rare earth metals as a foreign policy tool against the more powerful Japanese and U.S. competitors, threatening, and at times executing, embargoes as a sort of ransom.

The discovery has led many observers, including the Wall Street Journal editorial board, to predict the end of China's exploitation of rare earths exploitation. The country's leadership, they argue, will have to acknowledge that it can no longer use its near-total control over the resource as a weapon against the U.S. and Japan:

Markets provide reliable sources because the price mechanism has incredible power: The higher prices caused by restricted access to rare earths are leading to new supplies, which will in turn bring prices down again. Once again, the main loser from China's statism is China itself.

The free market has indeed led us to a new and plentiful supply of rare earth minerals, but it has inconveniently placed them about 10,000 to 20,000 feet beneath the Pacific. "A mine like this takes five to seven years to start up," Franz Meyer, a mineralogist at the University of Aachen, told German newspaper Deutche Welle. "Underwater mining can take even longer to get going."

Part of the reason it might take even longer than the usual five to seven years is that no one has ever built a deep-water rare earths mine before, no one has any idea what technology would even be necessary, and in any case no one is developing that technology. "Rare earth elements have never been obtained from these sorts of depths before. Entirely new technologies will need to be developed for the extraction," Daniel Briesemann, a natural resources expert at Commerzbank, also told the German newspaper.

Inevitably, however, as the Wall Street Journal writes, it will almost certainly be worth someone's time to develop the necessary technology and to figure out how to build a rare earths mine -- something that is extremely environmentally damaging when done above the surface, which is why the U.S. stopped mining its domestic supply -- on the ocean floor. But that will not solve the larger dynamic that is underlying China's aggressive use of its rare earths near-monopoly. China's economic interests are in line with those of the developed world -- as much as we rely on Chinese resources, manufacturing, and exports, China relies far more on first-world industrial and consumer markets. But its foreign policy interests often contradict our own (or at least that's how Chinese leadership, as well as Japanese and U.S. leadership sometimes perceives it).

There is a litany of foreign policy areas where Chinese and developed-world interests currently conflict: control of the South China Sea, territorial disputes in the Western Pacific, UN-led embargoes and sanctions of rogue states, and the extent of Chinese versus American influence in East Asia. Any one of these issues could be resolved, just as any single piece of Chinese leverage (such as the near-monopoly over rare earths) has a potential work-around. But the underlying problem is that China and the developed world (typically the U.S. and Japan, sometimes joined by South Korea, Australia, and/or European powers) see themselves as inherently at-odds with one another.

The irony is that China's economic rise, something that has benefited us greatly, proves that we do not live in a zero-sum world. But we still view our foreign policies as competitive rather than cooperative. As G. John Ikenberry argued in a recent Foreign Affairs essay, China is so reliant on a cooperative global system that it will have eventually have no choice but to support that system rather than trying to simply work around it. Incentivizing China to cooperate will mean working with it rather than against it, will require giving it reasons to reciprocate rather than retaliate. That kind of shift could take years, even generations, and whether it happens or not will have very little to do with rare earth metals.

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