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Germany Feels First Chinese Rare Earths Squeeze

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 BrĂ¼derlesaid 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.


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