Wednesday, December 29, 2010

Rare earth elements and China: Flash back and now flash ahead

China, rare earth elements and an economic noose

Back in October I had written about the United States dependence on China for our budgetary well being in addition to our need for the critically needed rare earth elements that country controls so much of. Today they announced an export cut they claim is not strategic in nature. Let's wait for the ransom note before we pass judgement.

October 14, 2010: "China isn't just about the money": So you think that the only thing we needed China for was to buy our Treasury debt to fund our massive deficits? Wrong!... China, which we know has a quasi stranglehold on us financially, produces about 95% of the world's supply of REE... China is more than willing to flex its muscles and use any leverage at its disposal...

December 29, 2010: (Reuters) China has raised fresh international trade concerns after slashing export quotas on rare earths minerals, risking action from the United States at the World Trade Organization.

China, which produces about 97 percent of the global supply of rare earth minerals, cut its export quotas by 35 percent for the first half of 2011 versus a year ago, saying it wanted to preserve ample reserves, but warned against basing its total 2011 export quota on the first half figures.

The U.S. Trade Representative's office was "very concerned" about China's export restraints on rare earths and had raised its concerns with China, a spokeswoman said on Tuesday.

U.S. makers of high-tech products such as Apple Inc's iPads, along withJapanese companies have been scrambling to secure reliable supplies of the minerals outside of China as Beijing steadily reduces export allocations...

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