German
high-tech companies have reported their first supply shortages of rare earths
following a rapid diminution of Chinese export quotas on the precious metals,
which are used in everything from wind turbines to mobile phones and hybrid
cars.
According toSpiegel Online,
China
's blockade of shipments of rare earth metals is already causing some
German companies to suffer shortages.
German companies say they are
being pressured by Chinese officials to increase their investment in
China
if they want to be assured of access to rare earth minerals.
Since 2005,
China
has imposed a "rapid diminution of export quotas" on a number of rare
metals and is planning afull export ban as of 2015.
Although reserves are sufficient,
over 95% of production is currently located in
China
and it is feared that potential supply disruptions will hamper the
development of the green economy.
German Economy MinisterRainer Brüderlesaid yesterday (21
October) that attempts to monopolise rare earths presented a global challenge
that needs to be addressed at the G8 andG20next month.
Chinese policy
China
's
policy on rare earths has sat atop the trade agenda since it emerged that
China
had halted shipments to
Japan
during a territorial dispute.
Chinese export restrictions on
rare earths have already been challenged at the WTO by the
United States
, the EU and
Mexico
,
which say the policy helps Chinese producers who use the minerals at the
expense of foreign competitors.
Sun Zhenyu,
China
's ambassador to the World Trade Organisation, said this week that
China
's own stocks of the rare metals were depleting fast and that
Beijing
had to conserve them for environmental reasons.
Curtailing production would affect
both foreign customers and domestic producers, he said.
"We would like our partners
to also start working on some kind of production of rare earths of their own
resources," Sun said. "So we are very glad to see that some of our
trading partners are starting to do so."
Alternative sources
Rising prices and concerns about
Chinese supply have prompted companies in the
United States
and other countries to reopen mines that had been considered
uneconomic.
Countries are also realising the
importance of recycling these materials.
According to geologists, the best
hope for untapped rare earth metal depositories lie in
Greenland
and
Canada
. But a number of other countries, including
Russia
,
Ukraine
,
Kazakhstan
,
India
and
South Africa
, have them.
However, according to industry, it
could take three to five years for new mines to achieve full production.