The world’s electronics and automobile producers have been chafing under China’s trade restrictions on its virtual monopoly on the global supply of rare earth minerals, and Japan and Vietnam are moving to fight back. China currently controls about 90 percent of the world’s supply of rare earths, which are minerals vital to the manufacture of modern electronics and automotive parts, and Japan currently imports 60 percent of what China produces, which means Japan has felt the pinch of China’s tightening trade restrictions more than any other country. Japan has found an ally in Vietnam, a country that is thought to have vast reserves of rare earths, which it is eager to exploit. In 2010 the two countries entered into an agreement to bring Vietnam’s reserves to market, and now they have succeeded in opening a jointly financed technology center that will help process the ore containing the rare earths and ship it to Japan.
Japan is not the only country that has had cause to complain about China’s trade restrictions. Last March, Japan, the European Union, and the U.S. filed an official complaint with the World Trade Organization (WTO) on China’s rare earth trade restrictions. China claims that it only limits exports due to the considerable environmental toll of processing the minerals. The plaintiffs in the WTO complaint feel that the real reason for the restrictions is to force foreign companies to relocate their lucrative manufacturing facilities to China, where they are promised a more stable supply of the vital minerals.
Despite the name, rare earths are not such very scarce minerals. It is believed that there are enough of the minerals around the world to last for hundreds of years. The short-term problem is in the capacity to process the ores containing the rare earths. The heavy environmental impact of processing the minerals has left most of the world happy to allow China to do the bulk of the dirty work, but the growing importance of these resources, and China’s attempts to exploit its effective monopoly, have led countries around the globe to consider starting or restarting their mining and processing operations. Some experts are predicting that the current rarity of rare earths will soon become a glut, as more and more countries begin bringing these commodities to the global market.