October 20, 2010

The Japanese arrest of a Chinese fishing crew was met with (unconvincingly denied) restrictions on exports of rare earth metals. Keith Bradsher at the New York Times reports that now China is halting shipments to the United States as well. Aside from direct shipments from China, US firms also receive rare earth containing components from Japanese manufacturers.

China's action against the US may be in response to America's announcement on Friday that an investigation into illegal trade practices would be launched. Bradsher reports that soon after, Zhang Guobao, Director of the National Energy Administration and Vice Chairman of the National Development and Reform Commission, said, “I have been thinking: What do the Americans want? Do they want fair trade? Or an earnest dialogue? Or transparent information? I don’t think they want any of this. I think more likely, the Americans just want votes.”

Perhaps the Chinese officials will deny this story as they did with the Japanese one. Regardless, the dangers of reliance on a single source for any critical resource is become more starkly clear as events unfold.

Read the full story here

http://www.nytimes.com/2010/10/20/business/global/20rare.html?hp

October 17, 2010

New York Time Columnist Paul Krugman wrote an opinion editorial on America's dependence on Chinese rare earth metals.

He concisely says, "I don’t know about you, but I find this story deeply disturbing, both for what it says about China and what it says about us. On one side, the affair highlights the fecklessness of U.S. policy makers, who did nothing while an unreliable regime acquired a stranglehold on key materials. On the other side, the incident shows a Chinese government that is dangerously trigger-happy, willing to wage economic warfare on the slightest provocation."

The lessons, as he points out, are:

1. We need to develop non-Chinese sources of rare earths
2. China has the tendency to act irresponsibly, and are not hesitant to wage economic warfare to achieve its goals.

October 11, 2010

In the year 1271, the Mongolian Kublai Khan became the emperor of China. 3 years later, he launched an armada of between 500-900 ships to attack Japan. 736 years later, facing another Chinese threat relating to access to raw materials, Japan is joining forces with the Mongolians.

According to the Wall Street Journal, in the beginning of October, Japanese Prime Minister Naoto Kan and Mongolian Prime Minister Sukhbaatar Batbold agreed to cooperate to develop rare earth resources in Mongolia during a meeting in Tokyo.

Development of mine resources in resource-rich Mongolia will benefit both countries. Our country's research team will launch exploration of rare metals this month," Mr. Kan said.

October 7, 2010

The Promoting Natural Gas and Electric Vehicles Act of 2010 (S.3815) has been placed on the Senate calendar. The bill, introduced by Senator Harry Reid (D-NV), Senator Orrin Hatch (R-UT) and Senator Bob Menendez (D-NJ), will amend the Internal Revenue Code of 1986 to reduce oil consumption and improve energy security.

Section 2023 of the Act calls on the Secretary of the Interior should conduct a study that:

• (1) identifies the raw materials needed for the manufacture of plug-in electric drive vehicles, batteries, and other components for plug-in electric drive vehicles, and for the infrastructure needed to support plug-in electric drive vehicles;
• (2) describes the primary or original sources and known reserves and resources of those raw materials;
• (3) assesses, in consultation with the National Academy of Sciences, the degree of risk to the manufacture, maintenance, deployment, and use of plug-in electric drive vehicles associated with the supply of those raw materials; and
• (4) identifies pathways to securing reliable and resilient supplies of those raw materials.