6.02.2014 Institute of Rare Earths and Metals - Japan's Prime Minister Shinzo Abe compared the current situation between China and Japan this week with the English-German relationship before the First World War. He continued: “... the two European countries were close trading partners, like China and Japan today. Friends of globalization and democracy have long preached that expanding cross-border trade and investment in partner countries will reduce the likelihood of another war. "
His words certainly have a certain truth, but it is alarming that openly a probability of a coming war is being pronounced between the world's second and third largest economies and that no one is discussing it. Rather, this statement was tacitly accepted by both Japan and China.
If this political direction is maintained, adding the US as an ally of Japan is only a matter of time. One nation at a time would be involved in this conflict.
What does all this have to do with rare earths?
Very much. The western world would soon feel the dependence on China and its supplies of raw materials. Not only rare earths, but also many other metals such as germanium, gallium, graphites, etc., would rise only extremely in the price and very soon no longer be available.
Should China really disrupt that supply chain, the entire western industry, especially the high-tech industry, would be in serious trouble. In many areas, reverse technological developments would have to be accepted through the use of substitutes that were used before the use of rare earths.
The current Chinese-Japanese tensions should be another wake-up call for the West to launch an independent supply chain for rare earths and strategic metals. Governments should take the issue more seriously to drive the development of an independent supply chain. The production of rare earths is extremely expensive and technologically very expensive. Many rare earth mines do not have enough capital reserves to work at the necessary speed. We got an idea of what might happen to us in the years 2010 and 2011 when China came out with the possibility of an export quota reduction. Prices of almost all rare earths have risen between 300% and 3000% over a six-month period.
Nevertheless, there is a little hope. There have been a considerable number of mining operations in the western world promoting these coveted elements. The exploration time of an average rare earth mine is seven to nine years before production can commence. For over 85%, these mines rely on capital inflows through the stock markets around the world. But unfortunately they are very moody and rather restrictive in the case of an imminent war scenario.
It is to be hoped that in the Far East all those involved will keep a cool head so that threats will disappear from the daily political agenda.
Institute of Rare Earths and Metals Düsseldorf - www.institut-seltene-erden.org
