Hillary Clinton Assured Over Chinese Rare Earths Policies

After the Chinese government began closing the tap which was supplying the western world with the much needed elements for the manufacturing of hybrid and electric batteries, an intervention by Secretary of State Hillary Clinton ended with the Chinese Foreign Minister, Yang Jiechi assuring the American diplomat “about the export of rare earths.”

It's not clear what those assurances were, but it was clear that raising such a question in an official meeting means that the US is very concerned with the squeeze of the supply line. Earlier this month, the European carmakers expressed their concerns about the Chines course of action, while Japan complained that China has completely stopped after a Chinese fishing boat captain was detained by Japanese authorities.

"Supply difficulties or sharp price increases for these metals affect the competitive position of our companies," Matthias Wissmann, head of the German auto federation VDA said earlier this week. "That is why we need a strong commitment by political leaders in charge of the question to be assured of the raw material's availability."

China is the largest supplier and processor of rare earths. The country is responsible for over 95 percent of materials processed from lithium, neodymium, terbium, dysprosium, lanthanum or other materials.

Curiously enough, the bulk of these materials are not to be found in China, but mostly in South America, but the countries there will not be ready to process much for the next five years or so. This fact puts even more strain on China's manufacturing capabilities.

“China’s rare earth output cannot be raised fast enough to meet the entire world’s needs, as there are environmental factors to be taken into consideration with an increase in rare earth production,” Zhang Peichen, deputy director of the Baotou Research Institute of Rare Earths told The New York Times.