• 5 mins EIA Weekly Inventory Data Due Wednesday, Despite Govt. Shutdown
  • 4 hours Oklahoma Rig Explodes, Leaving Five Missing
  • 6 hours Lloyd’s Sees No Room For Coal In New Investment Strategy
  • 9 hours Gunmen Kidnap Nigerian Oil Workers In Oil-Rich Delta Area
  • 11 hours Libya’s NOC Restarts Oil Fields
  • 12 hours US Orion To Develop Gas Field In Iraq
  • 3 days U.S. On Track To Unseat Saudi Arabia As No.2 Oil Producer In the World
  • 3 days Senior Interior Dept. Official Says Florida Still On Trump’s Draft Drilling Plan
  • 3 days Schlumberger Optimistic In 2018 For Oilfield Services Businesses
  • 3 days Only 1/3 Of Oil Patch Jobs To Return To Canada After Downturn Ends
  • 3 days Statoil, YPF Finalize Joint Vaca Muerta Development Deal
  • 3 days TransCanada Boasts Long-Term Commitments For Keystone XL
  • 4 days Nigeria Files Suit Against JP Morgan Over Oil Field Sale
  • 4 days Chinese Oil Ships Found Violating UN Sanctions On North Korea
  • 4 days Oil Slick From Iranian Tanker Explosion Is Now The Size Of Paris
  • 4 days Nigeria Approves Petroleum Industry Bill After 17 Long Years
  • 4 days Venezuelan Output Drops To 28-Year Low In 2017
  • 4 days OPEC Revises Up Non-OPEC Production Estimates For 2018
  • 4 days Iraq Ready To Sign Deal With BP For Kirkuk Fields
  • 5 days Kinder Morgan Delays Trans Mountain Launch Again
  • 5 days Shell Inks Another Solar Deal
  • 5 days API Reports Seventh Large Crude Draw In Seven Weeks
  • 5 days Maduro’s Advisors Recommend Selling Petro At Steep 60% Discount
  • 5 days EIA: Shale Oil Output To Rise By 1.8 Million Bpd Through Q1 2019
  • 5 days IEA: Don’t Expect Much Oil From Arctic National Wildlife Refuge Before 2030
  • 5 days Minister Says Norway Must Prepare For Arctic Oil Race With Russia
  • 5 days Eight Years Late—UK Hinkley Point C To Be In Service By 2025
  • 5 days Sunk Iranian Oil Tanker Leave Behind Two Slicks
  • 6 days Saudi Arabia Shuns UBS, BofA As Aramco IPO Coordinators
  • 6 days WCS-WTI Spread Narrows As Exports-By-Rail Pick Up
  • 6 days Norway Grants Record 75 New Offshore Exploration Leases
  • 6 days China’s Growing Appetite For Renewables
  • 6 days Chevron To Resume Drilling In Kurdistan
  • 6 days India Boosts Oil, Gas Resource Estimate Ahead Of Bidding Round
  • 6 days India’s Reliance Boosts Export Refinery Capacity By 30%
  • 7 days Nigeria Among Worst Performers In Electricity Supply
  • 7 days ELN Attacks Another Colombian Pipeline As Ceasefire Ceases
  • 7 days Shell Buys 43.8% Stake In Silicon Ranch Solar
  • 7 days Saudis To Award Nuclear Power Contracts In December
  • 7 days Shell Approves Its First North Sea Oil Project In Six Years
Alt Text

Will Oil And Gold Prices Rise This Year?

Both gold prices and oil…

Alt Text

Don’t Expect Palladium Prices To Plunge

Palladium has recently soared to…

Alt Text

How Long Will The Lithium Rush Last?

As the race to secure…

John Daly

John Daly

Dr. John C.K. Daly is the chief analyst for Oilprice.com, Dr. Daly received his Ph.D. in 1986 from the School of Slavonic and East European…

More Info

China, Japan Minuet Around the Issue of Rare Earths

China, Japan Minuet Around the Issue of Rare Earths

It’s official – China’s de facto monopoly on current rare earths production is a threat to the global economy.

As least, that was the gist of hearings on 21 September by the U.S. House of Representatives Committee on Foreign Affairs Subcommittee on Asia and the Pacific.

Center for a New American Security fellow Christine Parthemore ominously intoned, "Reliable access to critical minerals is a matter of both economic and geostrategic importance to the United States. Today, no minerals are more troubling to U.S. security and foreign policy than rare earth elements. Supplies are concentrated mostly in the hands of one supplier with its own rising demand, and the United States today has no good options for recycling rare earth minerals or substituting more easily obtained minerals. Even more important to the current circumstances, the United States possess rare earth reserves that will be economical to produce, which will be an important means of mitigating the foreign policy challenge surrounding rare earths while creating domestic jobs."

Not that the West should have been blindsided, as in 1992 China’s former Premier, Deng Xiaoping commented, “The Middle East has oil. China has rare earths.”

In 2010 the Chinese government cut its rare earth export ceiling by 40 percent from their 2009 levels, causing prices to skyrocket, earlier this year reaching the dizzying level of over $100,000 a ton.

Japan has taken the most interesting approach to resolving the supply dilemma. While a number of Japanese companies have relocated some of their production facilities to China to avail themselves of guaranteed access and lower rare earth prices, the Japanese government just announced that it will supply about $3.9 million in a subsidy to major motor manufacturer Nidec Corp. and three other firms that are working to reduce the use of rare earths.

The obvious solution?

Dig baby dig, to paraphrase Sarah Palin.

As for the rest of the industrialized world, Molycorp, Inc. President and Chief Executive Officer Mark A. Smith told the subcommittee that his company, the Western Hemisphere’s only producer of rare earth oxides and the largest rare earth oxide producer outside of China, is ramping up production at its Mountain Pass, California facility and hopes to be able to cover the bulk of U.S. rare earth usage, currently running at 15,000-18,000 tons per year, by the end of 2012.

According to a new report from Illinois-based Technology Materials Research LLC, sufficient rare earth sources exist outside China to compensate for its recent export cuts as early as 2013 for some elements. Rare earth mining is now proceeding at sites as far afield as Estonia, Mongolia, Australia and Malaysia.

Accordingly, the sudden spasms of fear in Western capitals about Chinese rare earth export policies remain largely a tempest in a teacup.  The Western response in the short term should be a judicious mix of conservation and expanded production. After all, there are a number of former rare earth mine sites in the U.S. alone that were abandoned years ago as unprofitable due to low prices – at $100,000 a ton, such is obviously no longer the case.

Furthermore, some analysts believe that if the Chinese economy continues to boom, within the next several years China could itself become an importer of some of the more exotic rare earths.

As for the possibility of a nation becoming totally self-sufficient in rare earths production, we’ll leave the final word to Molycorp’s Smith, who told his congressional audience, “It is important to note that there may always be some rare earths that the U.S. will need to import from other nations.”

By. John C.K. Daly of Oilprice.com




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News