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07 February 2011 EurActiv

The EU, US and Japan Should Co-operate To Diversify Supply Sources

Major rare earth-consuming countries should join forces to diversify their supply sources and develop substitutes for such materials, Keiichi Kawakami of the Japanese Ministry for Industry said yesterday (3 February).

Following the adoption of EU policy plans on raw materials on Wednesday (2 February), all major countries have devised rare earths strategies and "it is high time" to strengthen international cooperation, said Kawakami.

The deputy director-general of the Manufacturing Industries Bureau at the Japanese Ministry of Economy, Trade and Industry (METI) was in the European Parliament to present Japan's Rare Earth Elements (REE) Strategy.

The strategy was adopted in October 2010 after China, which accounts for 97% of world production of rare earths, halted shipments to Japan over a territorial dispute last September.

China has been gradually reducing export quotas for rare earths since 2005 as part of an effort to retain more of the minerals for domestic industry, a policy that has caused alarm among nations that depend on them for high-tech and military applications. The country is now mulling a full export ban as of 2015.

These developments have also caused concern also among worldwide manufacturers of high-tech products, ranging from computers to electric car batteries and wind turbines, and have fuelled EU worries about access to materials.

The US Department of Energy (DOE) adopted a Critical Materials Strategy in December 2010, with a special focus on clean energy.

Triangular cooperation

Kawakami noted that the United States and Japan had already held a roundtable on rare earths in late November 2010 and are to renew the experience later this spring. EU and US officials met to discuss the same topic in early December.

"All of the [rare earth-]consuming countries' problems need to be solved through cooperation," said Kawakami, suggesting that countries like Japan, the US and the EU build a "triangular cooperation" network.

He said that the focus should be on better understanding the supply chain, strengthening efforts to diversify supply sources, increasing recycling, and developing both substitute materials and new technologies that reduce the amount of rare earths used.

Cooperation is also needed to encourage China to "establish quotas sufficient to prevent adverse effects on the world industrial supply chain," Kawakami added.

Bringing China back to the table

German MEP Reinhard BŁtikofer (Greens/European Free Alliance), the European Parliament's rapporteur on raw materials, said that efforts should be made "to bring the Chinese back to the table".

While the EU and US are mulling action against China's rare earth export quotas in the World Trade Organisation (WTO), BŁtikofer warned that the WTO response - even if positive for the plaintiffs - "might come too late".

An official from the Japanese delegation also expressed concern over the timeframe at the WTO. He noted that the trade body is "not the only answer" and that Japan-EU cooperation on the matter could well take place in the framework of the OECD as well.

Source: EurActiv /...

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