The Strategic and Security Implications of Rare Earths

Abstract

Patrolling near the contested Islands of Senkaku/Diaoyu in the East Asian Sea on 8 September 2010, a Japanese Coast Guard crew detained the captain of a Chinese fishing boat whose crew was plying their trade near the Islands claimed as Japanese territory. The waters around these contested islands contain rich fishing grounds in addition to potentially large deposits of oil and natural gas. The fishing boat captain was taken to Japan. Meanwhile, the Chinese government vehemently protested, and, ultimately, the fishing boat captain was returned to China, 16 days later on, 24 September 2010. During the 16-day diplomatic imbroglio between China and Japan and, it would appear, as part of an effort to increase pressure on Japan to release the Chinese fishing boat captain from custody, the government of China, on 10 September 2010, ceased rare earth metals exports to Japan. This action led to substantial distress within the tight knit circles of Japanese government and business elites owing to Japan's absolute dependency on rare earth imports from China to feed its production of high technology products on which its economic model is based. In effect, China, in combination with other forms of diplomatic pressure, used rare earths as a bludgeon to forcibly coerce Japan into aligning its policy with Chinese interests or suffer economic hardship. The use of rare earths by China in this manner was made possible by the fact that China presently controls 95 percent of global rare earth production, Japan relies on China to supply 80 percent of its rare earths consumption, and that Japan has no readily available natural endowment of rare earths or substitutes.

Byproduct Surplus: Lighting the Depreciative Europium in China’s Rare Earth Boom

“…Figure shows the trade network of Eu in three representative years, when the main trading partners of China were Japan, Korea, India, the United States, and Brazil. In 1994, China mainly imported Eu-doped phosphors from Japan and Korea due to their advanced technology of phosphor production, and these two countries provided 60% of the total imported Eu (Figure a). As China increased its domestic production of phosphors and relied less on importation, it started to export Eu-containing products to other countries such as the United States, Japan, and Brazil (Figure b).…”

Understanding Rare Earth Elements as Critical Raw Materials

“…Prices rose very significantly for many REEs in 2010/2011 more than ten-fold [58]. This in turn meant that a number of countries (Australia, followed by the US, Canada, and, with some delay, Brazil [59], Malaysia, Russia, Thailand, and Vietnam) saw the (re)opening [60] or expansion in established mines [61] and of known and accessible reserves [62]. From the end of 2016, global REE prices significantly rose again [63].…”

Trust in numbers: Serious numbers and speculative fictions in rare earth elements exploration

“…The conversations I shared with Mercantile staff revealed very different hopes and anxieties than those coloring other public pronouncements about the possible futures facing the REE industry writ large. Even after junior company stock prices declined dramatically from 2012 onward, TSX-V officials continued to hail the rare earths exploration industry as a model for a new kind of venture capitalism (Kiggins, 2015). For those who invested early and wisely, they insisted, REE projects promised far greater potential value than prospects for conventional commodities whose markets and material applications were already well understood.…”