IAFF 3180: Globalization & National Security Final Research Paper Professor Celina Realuyo Monday, April 25 th , 2011
Reversing Chinas Chokehold on Rare Earth Elements
On September 7 th , 2010, a collision between a Chinese fishing vessel and a Japanese Coast Guard patroller near disputed waters surrounding the Senaku and Diaoyuti Islands in the East China Sea sent seismic tremors through global politics, resulting in a protracted diplomatic standoff between Beijing and Tokyo. 1 The global supply chain of rare earth elements (REEs) was chiefly impacted. Beginning on September 21 st , Japanese importers reported that China had halted trade of the metals, crucial in the development of high-tech products that are vital to the global economy: from mobile phones to jet fighter engines and hybrid automobile batteries. 2 Beijing also sought to assert its power as a supplier of REEs to the West, expanding the embargo to the United States and Europe through a 30% cut in trade quotas. Policymakers accused the Chinese of attempting to use their resource wealth as a political weapon. 3 Beijing
1 Richard C. Bush III, China-Japan Security Relations, Brookings Institution Press, October 9, 2010, accessed March 30, 2011, http://www.brookings.edu/~/media/Files/rc/papers/2010/10_china_japan_bush/10_china_ japan_bush.pdf. 2 Mari Yamaguchi, China rare earth exports to Japan still halted, Bloomberg Businessweek, October 21, 2010, accessed April 7, 2011, http://www.businessweek.com/ap/financialnews/D9J02PF01.htm. 3 Keith Bradsher, China Said to Widen Its Embargo of Minerals, The New York Times, October 19, 2010, accessed April 23, 2011, http://www.nytimes.com/2010/10/20/business/global/20rare.html?_r=1. Detsch 2 countered that the cut was implemented on the grounds of environmental protection and resource conservation. 4
Between 2006 and 2009, according to the U.S. Geological Survey, the United States was 100% dependent on foreign sources for rare earth supplies, with China supplying 92% of inputs. 5 Indisputably, Beijings status as a dominant producer gives it a tactical economic weapon against Washington: using its rare earth monopoly as a chokehold, China can adversely affect national security, damaging American manufacturing of green technology and increasing our dependence on foreign sources of oil, allowing capital to flow towards anti-American dictators around the world, such as Hugo Chavez and Colonel Muammar al-Qaddafi. It has also hurt the bilateral relationship between the two countries, vital to curbing Iranian nuclear power and moderating tensions between Pyongyang and Seoul on the Korean Peninsula. Continual reduction in Chinas REE supply quotas is due to increased domestic demand, which has nearly quadrupled since 2000. Direct control of the industry allows the Politburo to accomplish its own central goals: consolidation of their domestic supply of REEs serves to stoke a green development drive and expedite the creation of strategic supply reserves to ascertain their dominance in the marketplace. 6 These aggressive behaviors clearly demonstrate Beijings intent: to take a larger slice of the
4 John W. Miller and James T. Areddy, Trade Judges See Flaw in China Policies, The Wall Street Journal, February 18, 2011, accessed April 20, 2011, http://online.wsj.com/article/SB20001424052748703561604576150301821467250.html. 5 Rare Earths Factsheet 2011, U.S. Geological Survey, accessed April 6, 2011, http://minerals.usgs.gov/minerals/pubs/commodity/rare_earths/mcs-2011-raree.pdf. 6 Steve LeVine, Is Chinas rare earth power play really such a big deal? Foreign Policy, October 21, 2010, accessed April 1, 2011, http://oilandglory.foreignpolicy.com/posts/2010/10/21/is_chinas_rare_earth_power_play_ really_such_a_big_deal. Detsch 3 overall global market place for rare earths and to vault up the supply chain, using export tariffs and boosting exports with the sale of valuable finished goods to other countries. 7
Chinas chokehold on the supply chain of rare earths is forcing governments to look internationally to diversify supply in a race for resources and hurting cooperation between Washington and Beijing on issues of mutual importance. The United States must globalize: collaborating with a variety of producers in order to diversify supply and ramping up domestic production to sustain economic growth. Importance of the Supply Chain to U.S. National Security For the United States, the battle over rare earth elements is a vitally important one for several reasons. First, Chinas strategic control of REE resources could cut into economic growth and international trade at a time when markets are still emerging from the tremors of economic recession. With the supply chain continually short-circuited, Washington would also be unable to plan strategically for its national security needs. 8
REEs have a myriad of defense uses, including guidance and control, optics, fuel efficiency, surveillance and detection, communications, and lasers. 9 Jack Lifton, a rare earths expert, argues that Americas green industry, a national security priority for the Obama Administration, stands to suffer the most from a shutdown, as it depends on REEs
7 The Difference Engine: More precious than gold, The Economist, September 17, 2011, accessed March 30, 2011, http://www.economist.com/blogs/babbage/2010/09/rare- earth_metals. 8 Valerie Bailey Grasso, Rare Earth Elements in National Defense: Background, Oversight Issues, and Options for Congress, Congressional Research Service, March 31, 2011, accessed April 17, 2011, http://www.fas.org/sgp/crs/natsec/R41744.pdf. 9 Military Applications for Rare Earth Technologies, Rare Earth Industry and Technology Association, accessed April 6, 2011, http://www.reitausa.org/storage/downloads/Military%20Applications%20Pyramids.pdf Detsch 4 as a startup technology, 10 necessary in constructing components of wind turbines and electric vehicles, as the strategy rightly acknowledges. 11 Prolonged disruption in REE supply would force the U.S. to continue to rely heavily on petroleum, giving producers such as Venezuela and Russia increased capital in international politics, diminishing Washingtons national security prospect. Chinas erratic behavior in rare earth markets is deeply rooted in their foreign policy motivations: by building a strategic chokehold on the commodity, Beijing can build its way up the supply chain to re-assert their diminishing status as the dominant exporter to the West. 12
The murky state of rare earth markets reflects the lack of candor in the U.S.- Chinese relationship: while American officials publicly said they had sought assurances that China would continue to supply rare earths to the West before President Hu Jintaos visit to Washington in January 2011, the joint statement issued after the meeting of Presidents Obama and Hu made no mention of the matter. 13 Speaking at a press conference with his counterpart, President Obama called Americas bilateral relations with the Chinese positive, constructive, and cooperative and lauded Beijings role as a partner in foreign policy, cooling tensions between Pyongyang and Seoul on the Korean
10 Steve LeVine, Is Chinas rare earth power play really such a big deal? Foreign Policy, October 21, 2010, accessed April 1, 2011, http://oilandglory.foreignpolicy.com/posts/2010/10/21/is_chinas_rare_earth_power_play_ really_such_a_big_deal. 11 Blueprint for a Secure Energy Future, The White House, accessed March 31, 2011, http://www.whitehouse.gov/sites/default/files/blueprint_secure_energy_future.pdf. 12 Joe Weisenthal, Chinas Trade Surplus Tumbles in December as Export Growth Collapses, Yahoo! Finance, January 10, 2011, accessed March 17, 2011, http://finance.yahoo.com/tech-ticker/china's-trade-surplus-tumbles-in-dec.-as-export- growth-collapses-535792.html?tickers=FXI,PGJ,EPP,EEM,EWH,EWT,EWY. 13 Keith Bradsher, China Seizes Rare Earth Mine Areas, The New York Times, January 20, 2011, accessed March 27, 2011, http://www.nytimes.com/2011/01/21/business/global/21rare.html. Detsch 5 Peninsula and supporting sanctions against Iran on the United Nations Security Council. 14
While the Presidents rosy language is not a perfect portrait of reality, one thing is clear: tensions over rare earth markets have the potential to derail any progress in the U.S.- China relationship, damaging national security prospects for both nations. Rare Earth Market Picture The worlds most dominant producer of REEs, China was responsible for an estimated 95% of global production in 2010, increasing from 27% in 1990 despite controlling only 36% of total global reserves. 15 The idea that REEs are actually rare is something of a misnomer: although somewhat abundant near the earths crust, they are not concentrated enough in any specific area to make them easily obtainable at a reasonable price. 16 In total, there are seventeen REEs, which are primarily divided into two categories: light and heavy (See Figure 1). 17 Light rare earths (yttrium, lanthanum, and neodymium) can be used as light aluminum-scandium alloy for aerospace components, high refractive index glass, and computer memories, while heavy rare earths (terbium, dysprosium, and ytterbium), less abundant and more expensive, are used in
14 Transcript of the Obama-Hu News Conference, The Wall Street Journal Washington Wire, accessed April 20, 2011, http://blogs.wsj.com/washwire/2011/01/19/transcript-of-the-obama-hu-news-conference/. 15 Anil Das, Facts of Chinas rare earth reserves Commodities and Futures, International Business Times, March 3, 2011, accessed March 30, 2011, http://www.ibtimes.com/articles/118284/20110303/rare-earth-minerals-china-u-s- geological-survey.htm. 16 Marc Humphries, Rare Earth Elements: The Global Supply Chain, Congressional Research Service, September 30, 2010, accessed April 1, 2011, http://www.fas.org/sgp/crs/natsec/R41347.pdf. 17 Rare Earths Factsheet 2011, U.S. Geological Survey, accessed April 6, 2011, http://minerals.usgs.gov/minerals/pubs/commodity/rare_earths/mcs-2011-raree.pdf. Detsch 6 rare-earth magnets, x-ray machines, infrared lasers, and PET scan detectors (See Table 1). 18
Stabilization of rare earth markets over the long term will be critical. In the short term, because there are no rare earth mines operating in the United States, Washington will need to pair with international allies and a myriad of suppliers to ensure free flow of supply. 19 Chinas export tariffs, designed to keep rare earths within the domestic market, have caused global prices to skyrocket, with the value of exports jumping from $232.5 million in 2009 to $630.5 million in 2010 (See Figure 2). 20 This year, the situation could worsen: some of the most significant elements in the supply chain, including neodymium, lanthanum and cerium will be moved to the 25% tariff bracket. 21 A new tax imposed on heavy rare earths in March by the Chinese Commerce Ministry sent further shockwaves through tenuous global markets, after prices had already hit $34,000 per ton, up from 2010s average of $14,405 per ton. 22
Global demand is estimated at 134,000 tons per year, with global production around 124,000 tons annually. The difference is covered by readily available, above ground stockpiles. Demand is projected to increase rapidly in the short term to 180,000
18 John Neuman, Rare Earth Materials in the Defense Supply Chain (paper presented at briefing for congressional committees, Washington, DC, April 1, 2010). 19 Lara Crigger, Jack Lifton: US Has Been Foolish On Rare Earth Metals, Technology Metals Research, September 4, 2010, accessed April 16, 2011, http://www.techmetalsresearch.com/2010/09/jack-lifton-us-has-been-foolish-on-rare- earth-metals/. 20 Rare earth metals prices vs. gold, Reuters, accessed April 7, 2011, http://graphics.thomsonreuters.com/F/10/CMD_RAREPRC1010.gif. 21 Bloomberg News, China Raises Export Taxes of Some Rare Earths to 25%, Bloomberg Businessweek, December 16, 2010, accessed April 6, 2011, http://http://businessweek.com/news/2010-12-16/china-raises-export-taxes-of-some-rare- earths-to-25-.html. 22 Michael Montgomery, Rare Earth Prices Jump and a New Tax is Imposed, Rare Earth Investing News, March 28, 2011, accessed March 30, 2011. Detsch 7 tons annually by 2012, and exceeding 200,000 tons per year by 2014. 23 Chinas production output will only reach 160,000 tons per year by 2014 (See Figure 3). 24 This means that, unless another supplier is to account for the rest of the demand, a shortfall of 40,000 tons per year will occur, although the USGS estimates that global reserves and potentially undiscovered resources will be enough to meet demand, making diversification an economic and national security necessity. Rethinking the Global Supply Chain The Senaku incident, which highlighted Chinas chokehold on the global supply chain, is proof that rare earth exploration has become a significant driver of globalization, as it resulted in increased interest in diversification of the supply around the globe. 25
For the United States, this will be important in sustaining national security and economic prosperity. While there is no current production of REEs in the United States, it boasts at least 13.0 million metric tons in reserves. 26 Colorado-based Molycorp Minerals owns a rare earth mine in Mountain Pass, California which is slated to be ready for full-time production of 20,000 tons of rare earths per year by 2012, equaling 16% of Chinas total production output in 2010. 27 Modicums of rare earth supply also exist in Wyoming,
23 Ibid. 24 Dudley J. Kingsnorth, Rare Earths Supply: Alternatives to China (presentation at SME Annual Meeting, Sydney, Australia, February 4, 2008). 25 Damon van der Linde, The Rise in Global Demand for Rare Earth, International Business Times, March 24, 2011, accessed March 27, 2011, http://www.ibtimes.com/articles/126245/20110324/the-rise-in-global-demand-for-rare- earth.htm. 26 Jack Lifton, A Rare Earth Crisis? (presentation at the American Enterprise Institute for Public Policy Research, Washington, DC, April 6, 2011). 27 Brett Hartke, Racing for Heavy Rare Earths, Resource Investor, December 30, 2010, accessed April 20, 2011, http://www.resourceinvestor.com/News/2010/12/Pages/Racing- for-Heavy-Rare-Earths.aspx. Detsch 8 Idaho, and New Mexico, but they are still being explored and could take up to 15 years to become fully viable (See Figure 4). 28
Internationally, Australias Lynas Corporation has also taken a vested interest in using Malaysia as a potential supplier and refiner of rare earths, investing $230 million to build a rare earth refinery in the port city of Kuantan, which will process neodymium and yttrium from the Mt. Weld depository. 29 Canada, which has larger deposits of heavy rare earths than the United States, has projects in Hoidas Lake, Saskatchewan, which may contain reserves of up to 1.5 million tons of REEs, 30 and at Thor Lake, in the Northwest Territories, containing indicated mineral resources of up to 57.46 million tons of REEs. 31
Japan, which felt the brunt of Beijings supply quota cuts last fall, forged a significant supply deal with Vietnam on October 31 st , 2010, making Tokyo an important investor in rare earth element exploration in the Northwestern Lai Chau province. 32 Additionally, a consortium of Japanese and South Korean firms recently sought a $2 billion dollar deal to buy a stake in a Brazilian mining company to explore for alternative sources of REEs. 33
Greenland has also emerged as a potential game changer in rare earth markets with the
28 United States A Summary of Domestic Deposits and a Global Perspective, U.S. Geological Survey, accessed April 1, 2011, http://pubs.usgs.gov/sir/2010/5220/. 29 Keith Bradsher, Taking a Risk for Rare Earths, The New York Times, March 8, 2011, accessed March 30, 2011, http://www.nytimes.com/2011/03/09/business/energy- environment/09rare.html?ref=science. 30 Hoidas Lake, Saskatchewan, Great Western Minerals Groups Ltd., accessed April 24, 2011, http://www.gwmg.ca/html/projects/hoidas-lake/index.cfm. 31 Thor Lake Introduction, Avalon Rare Metals Inc., accessed April 20, 2011, http://www.avalonraremetals.com/projects/thor_lake/thor_lake_intro/. 32 Rare earths supply deal between Japan and Vietnam, BBC News, accessed March 24, 2011, http://www.bbc.co.uk/news/world-asia-pacific-11661330. 33 Japanese and Korean firms look to Brazil for rare metals, BBC News, accessed April 10, 2011, http://www.bbc.co.uk/news/world-south-asia-12631102. Detsch 9 Kvanefjeld multi-element project, containing 14% heavy-rare earth minerals. 34 Estonias Silmet Factory produces 3,000 metric tons per year of REEs as a refiner of Russian ores. 35 Finally, Great Western Minerals Group expects to see output of 2,700 tons per year from its Steenkampskrall mine, 250 miles northwest of Cape Town, South Africa once it is brought online in 2013. 36
Overall, at least 40% of the worlds rare earth reserves are located in the United States or in ally nations, with many of these expected to be available between now and 2013 (See Figure 5). 37 Diversification and globalization of the rare earths supply chain is not just of political importance: it is an economic necessity. By 2012, Chinas domestic consumption will outpace domestic production, forcing the U.S. and its allies to diversify. By 2015, China is expected to become a net importer of rare earth elements as it struggles to compensate for domestic demand. 38 When the U.S. Department of Defense announced last year that Afghanistan hosted deposits of untapped mineral resources, including deposits of rare earth elements valued at $7.4 billion, China jumped at the opportunity.
34 Rare Earth Elements at Kvanefjeld, Greenland Minerals and Energy Ltd., accessed April 22, 2011, http://www.ggg.gl/Rare-Earth-Elements/Rare-Earth-Elements-at- Kvanefjeld.htm/. 35 Anneli Reigas, Estonias rare earth break Chinas market grip, AFP, November 30, 2010, accessed April 10, 2011, http://www.google.com/hostednews/afp/article/ALeqM5itXbI57zv- lwfcaFdBdh7UZXuVuA?docId=CNG.a00f68010092a06189a0276c763e93a4.141 36 Wendell Roelf, Great Western sees S. African rare earth production, Reuters, February 9, 2011, accessed March 30, 2011, http://af.reuters.com/article/investingNews/idAFJOE7180ER20110209. 37 TMR Advanced Rare-Earth Projects Index, Technology Metals Research, accessed April 7, 2011, http://www.techmetalsresearch.com/metrics-indices/tmr-advanced-rare- earth-projects-index/. 38 Gareth Hatch, Will China Become A Net Importer of Rare Earths By 2015? Technology Metals Research, February 27, 2011, accessed April 6, 2011, http://www.techmetalsresearch.com/2011/02/will-china-become-a-net-importer-of-rare- earths-by-2015/. Detsch 10 As China attempts to move up the supply chain and build dominance in the export of finished goods to global markets, it will look to increase its hold on mineral supplies elsewhere, potentially making access more difficult for the United States and its international partners. Current Strategies Washington has not shied away from the challenges present in rare earth markets: a myriad of responses from the legislative and executive branches have cut to the heart of the problem. Most recently, on April 6 th , 2011, Representative Mike Coffman, Republican of Colorado, introduced the Rare Earths and Critical Minerals Revitalitization Act of 2011 (RESTART). Coffmans bill hopes to reestablish competitive domestic rare earths production, refining, and magnet industries by expediting the permitting process for such projects, and strengthen the supply chain by formally creating a stockpile of rare earths in the Defense Logistics Agency of the Department of Defense and legally designating rare earths as vital to U.S. national security. 39 These are critical steps, but more international diversification is needed, in both the short term and long term, to ensure the free flow of rare earths to domestic markets. To that end, RESTART fails: while it authorizes the Secretary of the Interior to collaborate with international partners to ensure supply, it does not insist upon any formal mechanism of doing so, which is badly needed. The U.S. Department of Energys comprehensive strategy on rare earths, the 2010 Critical Materials Strategy, is an effective evaluation of Americas position in the market and a decent policy blueprint for the future. It emphasizes the creation of an integrated
39 H.R. 1388, Government Printing Office, accessed April 24, 2011 http://www.gpo.gov/fdsys/pkg/BILLS-112hr1388ih/pdf/BILLS-112hr1388ih.pdf. Detsch 11 research plan with respect to REEs and encourages Washington to work closely with allies in Japan and Europe to reduce disruptions and address critical needs, cutting to issues at the heart of the problem, such as information gathering, permitting and financing for production, stockpiling, recycling, and diplomacy. 40 Additionally, the D.O.E.s fiscal year 2012 budget supports the creation of an innovation hub to pursue research and development efforts in rare earth elements, including environmentally safe and responsible extraction, and mineral recycling and reuse. 41 While the Critical Materials Strategy covers a broad base of issues, its focus is too narrow: concentrating on the clean tech uses of rare earths while omitting major commercial and military uses. Additionally, a cohesive plan to assist private mining companies in permitting and extraction is needed. Internationally, the United States is mounting legal challenges to Chinas adversarial policies. On March 1 st , a confidential, preliminary World Trade Organization (WTO) report rebuked Chinas report that export restrictions on rare earth materials served the purpose of environmental protection and conserving scarce resources. 42 This came on the heels of several challenges from international actors: in 2009, the United States, Mexico and the European Union sued China at the WTO on the basis that rare earth export restrictions through quotas discriminated against global manufacturers,
40 2010 Critical Materials Strategy Summary, U.S. Department of Energy, accessed April 24, 2011, http://www.energy.gov/news/documents/Critical_Materials_Summary.pdf. 41 U.S. Department of Energy FY 2012 Budget Summary, U.S. Department of Energy, accessed April 4, 2011, http://www.gpoaccess.gov/usbudget/fy12/pdf/BUDGET-2012- BUD-10.pdf. 42 John W. Miller and James T. Areddy, Trade Judges See Flaw in China Policies, The Wall Street Journal, February 18, 2011, accessed April 20, 2011, http://online.wsj.com/article/SB20001424052748703561604576150301821467250.html. Detsch 12 giving Chinese producers an unfair edge. 43 While Washingtons efforts to use to international forums to address the rare earth quandary are admirable, President Obama needs to play hardball with Beijing in order to command the attention of the Politburo. He must threaten protectionist measures against China and contain market disruption by building a wide coalition of international allies to insulate the United States from further national security threats. Policy Recommendations To rebuild its shaky position in rare earth markets, Washington could use a number of effective policy tools. Internationally, cooperation and mediation will be vital. The Obama Administration should look to Japan to help gather signatories for a formal treaty agreement to address rare earth exploration, procurement, and trade between a myriad of suppliers and demanders. This would include Russia, Brazil, Australia, Canada, India and South Africa, among others, expanding on the grey areas of RESTART and the Critical Materials Strategy. Acting in tandem, this coalition could work to reduce supply from China. Washington must also engage its vast resources in the private and public sector to assist the development of this industry internationally: sending analysts for the U.S. Department of Interior and private engineers abroad to conduct comprehensive geological surveys to verify the capacity of reserves and build the mining and refining infrastructure necessary to promote greater global exploration and get alternative markets up and running. To this end, joint investments on mining and
43 Juliane von Reppert-Bismarck, WTO opens China to rare earth challengesources, Reuters, March 1, 2011, accessed March 30, 2011, http://af.reuters.com/article/metalsNews/idAFLDE72029E20110301?sp=true. Detsch 13 refining, such as those made by Malaysia and Australia for supply from the Mt. Weld mine, must become commonplace. 44
As Beijing shifts to a demander, Washington could eventually build its position as the hub of a global rare earth supply cartel, fairly moderating supply and prices in the market with the help of its allies, ensuring national security prospects for the long term. Washington must also continue to lead the charge against China in the WTO, pressing Beijing on vital issues of worker safety and environmental degradation. With their leverage in markets reduced as a result of this policy, China will be forced to comply. Domestically, the Obama Administration and Congress could promote a host of initiatives to get the industry back on track. Working with state governments to provide tax incentives to lower the cost of exploration and mining in the short term, as companies climb out of the red, could give the industry a much-needed boost. Additionally, the U.S. Department of Energy and the U.S. Department of the Interior should look to formally establish a governors conference on rare earths, giving states a formal mechanism by which to come to crucial agreements on mining and refining, and engaging the productive engine of the entire country. Congress must also look to develop a legislative strategy to implement rare earth substitution and recycling programs domestically, taking the pressure off suppliers and moderating market prices in the short-term. Finally, the
44 Marc Humphries, Rare Earth Elements: The Global Supply Chain, Congressional Research Service, September 30, 2010, accessed April 1, 2011, http://www.fas.org/sgp/crs/natsec/R41347.pdf. Detsch 14 Department of Energy will need to work in tandem with the Environmental Protection Agency to reduce the ecological impacts of mining. 45
Conclusion Last Septembers Senaku incident demonstrated the dangers of Americas dependence on Chinese sources of rare earths, which are necessary to sustain economic growth in the tech sector and defend Washingtons interests at home and abroad. However, though Beijing undoubtedly strengthened their chokehold on the global supply chain during the incident, their position in rare earth markets in the medium term is far from secure: with domestic demand rapidly increasing and the government keen on keeping supply within Chinas borders in order to create and sell finished goods to international markets, they are set to become an importer of rare earths by 2015. Additionally, as production ramps up globally, other states will compete with China in the sale of finished goods by refining rare earths themselves. In Washington, the Obama Administration and Congress have taken steps in the right direction on this issue: encouraging domestic production of rare earths and keeping pressure on Beijing through the World Trade Organization. Further approaches, both formal and informal, to build relationships with suppliers around the world, will be necessary for the United States to remain a competitive economic player on the global stage and successfully emerge from recession. In this light, greater globalization of the marketplace can only benefit Washington.
45 Katherine Bourzac, Can the U.S. Rare-Earth Industry Rebound? Technology Review, October 29, 2010, accessed April 4, 2011, http://www.technologyreview.com/energy/26655/?p1=MstCom&a=f. Detsch 15 Finally, as the Senaku collision demonstrated, there is much at stake in the battle for supply of rare earths for both China and the United States: acrimony could derail the tenuous security relationship between Beijing and Washington, and cast a pall of uncertainty over the fate of some of the Obama Administrations most important strategic interests, such as the stability of the Korean Peninsula and further sanctions against Iran. The strategic importance of unimpeded access to rare earths is manifold: developed countries depend on these materials to drive economic growth through commercial technologies and to build clean energy alternatives, breaking dependence on oil. For the United States, these rightly remain pillars of national security policy. Present developments show that the Senaku incident was perhaps just a taste of what is to come: the geopolitical competition between the United States and China will continue to intensify in the near future as Washington steps back from the brink of fiscal recession, and attempts to counter Beijings political weapon by building global rare earth partnerships.
Detsch 16 Maps, Graphs, and Statistics:
Figure 1
Source: U.S. Geological Survey
Table 1: Examples of Rare Earth Elements Used in Commercial Products Rare Earth Element Used Commercial Product Neodymium, praseodymium, dysprosium, terbium, lanthanum, cerium Hybrid electric motors and hybrid batteries Neodymium, praseodymium, terbium, dysprosium Computer hard drives, mobile phones, and cameras Promethium Portable x-ray units Scandium Stadium lights Europium, yttrium, terbium, lanthanum Energy Efficient light bulbs Europium, yttrium Fiber optics Cerium, lanthanum, neodymium, europium Glass additives Source: GAO analysis of government and industry data
Figure 2
Source: Thomson Reuters Datastream, Asian Metals Detsch 17
Figure 3
Source: Dudley Kingsnorth/Industrial Minerals Co. of Australia
Figure 4
Source: U.S. Geological Survey
Detsch 18 Figure 5
Source: U.S. Geological Survey/Reuters
Detsch 19 Bibliography
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