China halts exports of rare earths to Japan

TylerDurden

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By MARI YAMAGUCHI, Associated Press Writer – Tue Sep 28, 9:11 am ET

TOKYO – China's ban on shipments to Japan of rare-earth metals that are crucial for advanced manufacturing threatens to undermine the Japanese economy, a top finance official said Tuesday amid a territorial row between the rival Asian powers.

Japanese trading company officials say China halted exports to Japan last Thursday of rare earths - exotic metals that are used in magnets, computer disk drives, components for hybrid cars and other high-tech products. China's Ministry of Commerce denied there was a ban.

China produces more than 95 percent of the world's supply of rare earths. Australia also has rich deposits of the metallic elements but production is at a small-scale.

"The de-facto ban on rare-earths export that China has imposed could have a very big impact on Japan's economy," Economic and Fiscal Policy Minister Banri Kaieda told a news conference. "We need to restore Japan-China ties, especially economic exchanges, as soon as possible."

Japan and China are squabbling over the sovereignty of small islands in the East China Sea, a dispute reignited by the arrest of a Chinese fishing captain in early September after his vessel collided with two Japanese patrol boats near the islands.

To protest the captain's detention, China responded by suspending high-level contacts and cultural exchanges. Japanese prosecutors released the captain last Friday with the case still pending, but there was little sign of improvement in their troubled ties.

On Monday, logistics companies said China has stepped up customs inspections of goods shipped to and from Japan, slowing trade.

Japan's Finance Minister Yoshihiko Noda acknowledged growing concerns among businesses about the ban on rare-earth exports and delayed customs clearance for shipments to and from Japan.

Noda said Japan has submitted a statement to Beijing asking it to clarify the situation.

Japan and China are bound by multibillion-dollar ties of trade, investment and aid despite rivalry for regional leadership and lingering Chinese anger over Japanese wartime aggression.
 
Related… "U.S. threatens WTO action on China rare earth curbs"
Reported today on MSNBCand on Reuters; two perspectives of the same problem.

Not sure what good it will do other than sending formal notice. Then again it just may be part of the process necessary for alternate initiatives such as geopolitical alignments for cooperative & strategic mining.

Just guessing, KF
 
Come on...rest of the world.. let's get our mines working! IIRC there are several new mines in various build-up stages in the US atm, but none are scheduled to start production until 2014. ..or was that refining stations? I forget, one of them we have lot of, the other we have very few. It'll be interesting to see how the industry changes once more countries get rare earth mining and refining industries started...hopefully shift some of the global dependence off of China.
 
Reported today: China cuts rare earth export quotas in early 2011

Reuters said:
China cut its first batch of rare earth export quotas for next year by more than one-tenth, in the face of a threat by the United States to complain to the World Trade Organization over the export limits.
The drumbeat grows louder with each passing week.

Searching for indigenous alternatives, KF
 
So, if this is the same REE exporting limit, it has no effect on China selling magnets and motors and US magnets and things, it just prevents them from selling the raw ore.

This keeps more jobs in China. It's a pretty good idea for them. We should take a lesson from that.
 
On Reuters today: China defends rare earth quotas as in line with WTO

Reuters said:
Beijing has long insisted that other countries should share the responsibility for developing rare earths.

"The international community has a joint responsibility to ensure the supply of rare earths," Jiang said. "Other nations that have rare earth resources should proactively develop and make use of them, to jointly shoulder responsibility for global supplies."
Poppycock. First they squeeze out the competition by flooding the market, then they jack the prices or tighten the quotas to squeeze the market, and if we put another startup online then again with the flood of product. What complete nonsense. :p

~KF
 
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