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The World Trade Organization (WTO) recently made headlines over its decision to notify the Chinese government that it is in violation of international trade rules regarding the country’s raw materials export restrictions covering bauxite, zinc, yellow phosphorus and six other industrial minerals.

The case – brought about by the U.S., European Union, and Mexico in 2009 – upheld an the initial WTO ruling, and constitutes the supra-national body’s final holding on China’s policies.

Implications for rare earths?

Rare earth elements (REEs) – the group of 17 elements without which we would not have our smartphones, tablets, and flat screen TVs – were not at issue in the WTO’s decision. While the WTO does not treat prior rulings as precedent, some in the international trade community were quick to claim a linkage in the WTO’s logic to China’s export controls on rare earths.  European Union Trade Commissioner, Karl De Gucht, had this to say in a press statement:

China now must comply by removing these export restrictions swiftly and furthermore, I expect China to bring its overall export regime – including for rare earths – in line with WTO rules.

Supra-Nationalism versus Sovereignty

In a recent post for RareMetalBlog, American Resources principal, Daniel McGroarty, expressed skepticism that China would accept this linkage, citing what he called the “limits of law in cases of sovereignty,” pointing out that China’s REE stranglehold is neither a “force of nature” nor a “fact of geology.”

China may have a rare earth production monopoly, McGroarty explained, but it only possesses 36 percent of the world’s known reserves. He noted that compelling a sovereign nation to export what other nations could arguably explore and develop themselves would be a “tough case to make in the court of public opinion.”

Chinese officials have said they will adhere to the WTO ruling, but exactly how far they would go remains in question. Already, Reuters has pointed to a loophole in the ruling that allows for leaving export quotas in place for environmental reasons — a rationale frequently mentioned by Chinese authorities as they consolidate their rare earths mining sector.

Mining Weekly zeroes in on strategic metals issues under discussion at the annual Mining Indaba conference in South Africa (indaba, in zulu, is the word for a meeting on matters of substance).   Lara Smith of Core Consultants identifies cobalt, tantalum and the rare earths as high-risk metals, given a combination of uncertain supply and rising demand.

Electronics applications – particularly advances in miniaturization – are driving demand for tantalum in mobile phones and other wireless devices, while cobalt’s usage in electric car batteries and also in the burgeoning e-bicycle market has pushed past the metal’s long-standing applications as a super-alloy and catalyst.

The Rare Earths – with applications ranging from solar panels and CFL lighting to wind turbines and weapons systems – are a well-known family of metals to American Resource followers.

As for U.S. access to each of these metals, our import dependency ranges from 75% for colbalt – primary importers:  China, Norway, Russia and Canada – to 100% for tantalum and more than 99% for Rare Earths, with China again our leading provider.   DR Congo, subject to conflict metals legislation in the U.S., exports significant amounts of tantalum-bearing coltan to China, where it is refined and enters the global supply chain.

The U.S. National Defense Stockpile has suspended planned sales of its tantalum and cobalt stocks.  For cobalt, USGS estimates the U.S. is home to 1 million of 15 million tons worldwide.  No U.S. company has mined cobalt since 1971.  As for tantalum, USGS reports identify U.S. resources of about 1500 tons – twice the current global production – but notes that these resources are uneconomical.  With tantalum tripling in price in the past 3 years and Indaba’s experts predicting shortages ahead, perhaps the old assumptions about tantalum mining will get a fresh look.

In light of the recently announced investment deal between Molymet of Chile and U.S. Rare Earths miner Molycorp, which has significant strategic implications outlined by our very own Daniel McGroarty this weekend, it is only fitting that American Resources continues our ongoing educational campaign to highlight the breadth of U.S. mineral needs by designating “rhenium” (…) more

The United States Geological Survey announced that it has granted more than $260,000 for “new research on mineral resources important to [US] economy, national security, and land-use decisions,” including rare earths, niobium, and tantalum. more

American Resources followers know their Rare Earths from their rare metals, and that distinction is key to understanding a strategic investment that’s getting a lot of attention right now: Molymet of Chile’s $390 million investment in Molycorp, the U.S. Rare Earths miner. But while most analysts are looking for the commercial synergies in the deal, (…) more

With this week’s WTO ruling on China’s raw materials exports (visit RareMetalBlog for our very own Daniel McGroarty’s take) all eyes are once again on rare earths – and for good reasons, as these critical elements are the poster child of the challenges associated with resource dependency. However, a broader focus is needed, and tungsten (…) more

Wisconsin Gov. Scott Walker and like-minded state legislators are currently attempting to re-write the state’s mining laws to “create certainty in the regulatory process.”  Legislation that would streamline the permitting of iron mines passed the Assembly last week at a vote margin of 59 to 36, with the governor touting the benefits he says passage (…) more

While all eyes were on President Obama’s State of the Union address earlier in the week, this is also the time when our nation’s governors deliver their State of the State addresses, taking account of the current situation, and outlining their policy initiatives for the coming year.  From an American Resources perspective, Alaska Gov. Sean (…) more

While we can fully expect 2012 to be the year of partisan politics with the Presidential race kicking into high gear, we can probably all agree that we’d like to see the resurgence of the United States’ manufacturing base.President Barack Obama touched on the issue in his State of the Union address delivered on Tuesday, (…) more

Having intensified over the past few months with Russia reportedly willing to risk a new “Cold War” over the area’s vast resources, the geopolitics of the Arctic’s race for mineral riches has just been elevated to a whole new level with China having thrown its hat into the ring. According to the Wall Street Journal’s (…) more