Rare earth materials 'hoarded' by China, WTO case goes ahead

Rare earth materials 'hoarded' by China, WTO case goes ahead

Summary: Will the rare earth materials battle limit a future supply of smartphones, devices or hybrid technology?

SHARE:
7

The United States plans to argue a case in front of the WTO (World Trade Organization) that China, producer of the majority of rare earth minerals, is 'hoarding' its resources to the detriment of worldwide competition.

The crux of the matter is that Japan and the European Union believe China's exportation limits on rare earth materials are 'unfair'. President Obama announced Tuesday that the U.S. will be joining the case.

The minerals are essential components for manufacturers of many modern devices, including smartphones, wind turbines and missiles.

Hybrid technology also often relies on these materials, and the production of products including hybrid cars may also face limitations in the future without access to these resources. Over 95 percent of rare earth materials are mined in China.

Current export limitations mean that the majority of these materials never cross China's borders, and other nations are unable to purchase them. The U.S. government believes that the current export rulings show China is 'hoarding' these materials for its own future use.

Furthermore, the case stipulates that China is breaking international trade law, and the situation is causing otherwise unnecessary price increases in the global marketplace. In the future, dwindling resources could result in China dominating the technology market, and consequentially restrict global competition.

The Minister of Industry and Information Technology in China, Miao Wei, responded by saying:

"We would feel sorry for their decision to complain to the WTO. In the meantime, we are actively preparing to defend ourselves and will explain the case if they bring the complaint against us."

The lack of access to rare earth material from China may frustrate manufacturers across the globe, however, China states that mining restrictions are in place to control environmental damage and protect dwindling resources.

Recently, the country has suspended issuing new licenses for rare earth material prospecting and mining, imposed production caps, and tightened up export quotas. Miao also said that unless these measures were kept in place, some materials would be exhausted within 20 years due to excessive mining and exportation.

Obama said Tuesday that he did not want to target China, however, "when it is necessary, I will take action if our workers and our businesses are being subjected to unfair practices".

The U.S. has won previous battles with Chinese manufacturers concerning limitations imposed on exporting manufactured materials, and if China continues to restrict rare earth material mining, it may have detrimental consequences for innovative technological development in the future.

However, if China is not breaking international trade law and is focused on sustainability and environmental protection, then the case may result in businesses having to re-think their use of dwindling natural resources.

Image credit: CNET

Related:

Topics: Government, Banking, China

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

7 comments
Log in or register to join the discussion
  • They get the pollution, so why not the profits?

    They get all the pollution from producing them, so why should they not keep all the profits from them?

    Typical Obama "fairness" you've got it, I want some!
    wally_333
    • The issue is China restricting availability for political

      Purposes. Of course, the reason they can do this is because people like you, who think any sort of resource development is a rape of mother Gaia, have shut down all possibility of domestic production. And, no, don't even try to argue that the U.S. doesn't have any of these metals.
      baggins_z
      • Speaking of which ...

        The Mountain Pass, California, rare earth deposits were discovered around 1954:

        h t t p://geology.csupomona.edu/drjessey/fieldtrips/mtp/mtnpass.htm

        And we're finally getting around to utilizing the resource:

        h t t p://www.theatlantic.com/technology/archive/2012/02/a-visit-to-the-only-american-mine-for-rare-earth-metals/253372/
        Rabid Howler Monkey
      • you who?

        Who you calling people like you?!

        Jumping to conclusions with your tar brush. We've got plenty of oil too if we really wanted to produce it. But if you believe the "Peak Oil" crowd, whatever the excuse for not using our own, using up the Saudi's oil first is the smart long term play.
        wally_333
  • Bunch of cry babies.

    Quit crying about it and find your own. China doesn't want to be importing it 20 years down the road. They are just protecting themselves and there is nothing wrong with that.
    I'm sure there are other places that have it and are willing to mine it. ( After many years of paper work and countless hoops to jump through. )
    Rick Sos
  • It is obvious isn't it?

    No matter how nice our nation's president and his constituents try to be to the Chinese, they are still going to want to control the heck out of this thing. Our only option is to look in places around our own country that we haven't discovered yet. The Rocky Mountains, The Great Plains, The Mississippi River ... just to name a few. But, we must find out exactly what materials they are finding. Maybe, if we had NASA built a special satellite for detecting this kind of stuff in the earth's crust, it would be quite promising of a discovery.

    As for the media hounds and environmentalists, we only need to keep trade routes open for a much as we have been with the Euro and Asia - and it would best suite us to move forward with our own geological stance on this. The earth is very large and vast in size, and surely we could find the same or even like materials in our own land.

    We must not let this pass by, just as we shouldn't have let the re-capitalization of the Eastern Hemisphere occur between 1968 to 1987 because it is crucial that we implement this kind of project for our manufacturers and our industry. Otherwise, we will fail to keep up with the changes occurring in the world, and we wont be able to compete let alone work with the latest up-to-date technology.

    With all of the 'oil finding' and resource-rich planning & development ... there is no saying we cannot find more and more elements under our soil. Again, it is imperative that the Americans don't fall back on this one. This is not the same as when the China Northern Alliance of Mongolia and the Tibetan Coalition stood-up and declared that they found large amounts of Copper, an element that is widely used in today's electrical and micro-electronic devices. This is far greater of a cause and a reward that could come out of this if we just all stick together on this one.

    -~-
    cosmos-420man
  • So Slimy!

    The President neglects to inform that the US has ample supplies of rare-earths (and petroleum products), that it simply refuses to exploit for "environmental reasons". If I can see this - the Chinese obviously can and are Laughing at him!
    cjkosh@...