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The London REE Report: China, Mongolia, Japan

Last year, 90 percent of the U.S. imports for rare-earth metals were from China, according to data from the U.S. Geological Survey. But this year, according to USGS, the figure is 97 percent.

China accounts for about 97 percent of the world’s supply of rare earths and Japan is almost 90 percent dependent on China to obtain them, according to the Ministry of Economy, Trade and Industry.

China says that they didn’t cut Japan off from vital supplies of rare metals and earths last month, but judging by Japan’s frantic response it rather looks like they did. In a Chinese over reaction to a Japanese “provocation” over the Diaoyu Islands, called the Senkaku Islands by the Japanese and being the last bit of the Japanese empire assembled 1894-1945, China went ballistic and threw its weight around.  Japan is now attempting to stage a comeback of sorts, involving finding and extracting rare metals in Mongolia. I suspect that China will soon develop a Mongolian ploy too. China, I note, is nearer to Mongolia than Japan.

Mongolia joins rare earth quest
Kyodo News Monday, Oct. 4, 2010

Japan has agreed to help Mongolia develop mines to exploit rare earth metals in the wake of its bilateral ruckus with China over supplies of the crucial elements.

The accord was struck Saturday between Prime Minister Naoto Kan and his visiting counterpart, Sukhbaatar Batbold, Japanese officials said.

“Mongolia has high potential in mineral material development and this will serve the two countries’ national interests,” Kan was quoted as saying.

Batbold said Mongolia will be able to produce value-added products by using advanced Japanese technology, the officials said.

The meeting, which was also attended by senior Japanese officials from top trading houses and other companies, comes a day after the government unveiled policies to secure stabler supplies of rare earth metals. The steps include stockpiling and plans to diversify suppliers to reduce Japan’s heavy dependence on China.

—- A METI official said there are also precious reserves of rare earths in Kazakhstan and Vietnam, and that Tokyo will try to acquire stakes in mines beyond China to ensure supplies.


Tossing Mongolia’s hat into the rare metals and earths ring, adds yet another complication probably for the period 2015-2025, assuming that anyone finds any rare metal deposits there worthy of commercial exploitation.  For now, to use a Chinese proverb, “distant water doesn’t put out a fire”, and at this point we don’t even know if Mongolia holds any distant water. The Japanese rather assume that it does, and that it will be easy to extract.  I have my doubts that Mongolia brings any relief soon, if at all.

In other news, two firsts, and a change of policy in the Pentagon. Irrespective of what happens in the USA, wind parks are booming nearly everywhere else. Below, Romania sets out to build the world’s biggest wind onshore farm, an unlikely candidate to keep that title for long.

Iberdrola to Start Building World’s Largest Wind Park in 2011
Sept. 28 (Bloomberg) — Iberdrola SA will next year start building the first 600 megawatts of capacity for the world’s largest onshore wind-park in Romania as it seeks to produce energy for local and regional markets, Adrian Goicea, manager of renewable-energy unit Iberdrola Renovables Romania, said.

Construction of the planned park will start “sometime next year and is expected to be finalized in 2016-2017,” Goicea told reporters in Bucharest today. Iberdrola also plans to build a separate 80-megawatt wind-farm, starting “this autumn or in the spring” and delivered by mid-2011, Goicea said.

The Spanish utility said April 19 it acquired rights from the Romanian government to build the largest onshore wind-energy project with 1,500 megawatts of capacity.

—-The average cost to buy and install wind turbines is now estimated at 1.7 million euros ($2.3 million) a megawatt, Goicea said. Using those figures, Iberdrola’s Dobrogea project in southeastern Romania on the Black Sea would cost more than 2.5 billion euros.

“Iberdrola established a special trading company in Romania for the future sale of the produced energy from the wind-farms,” Goicea said. “We are analyzing all the opportunities from internal markets, exports, bilateral agreements.”

Iberdrola is also part of a venture to build and operate Romania’s planned two new nuclear reactors, together with Italy’s Enel SpA, Belgium’s Electrabel SA, Germany’s RWE AG and steelmaker ArcelorMittal.


In another “first” of a sort, the Marine Corps Base Hawaii becomes the first grid connected wave energy user in America. Wave action is an interesting power mechanism that competes with tidal power.  Like it or not, and a whole lot of entrenched interest loathe the idea, renewable energy is coming in our new 21st century. I have my doubts that wave energy has much future, and at this point in time it doesn’t affect rare metals, but that coud easily change as technology alters and projects scale up. Ever get that feeling this is like the Klondike gold rush? The Pentagon tries out renewable energy.

Ocean Power History in the Making, First Ever Grid Connection of Wave Energy Device -Hawaii
October 3, 2010 – 3:36 pm

Ocean Power Technologies, Inc. has completed the first-ever grid connection of a wave energy device in the United States at the Marine Corps Base Hawaii (“MCBH”), in conjunction with the US Navy. This connection demonstrates the ability of OPT’s PowerBuoy(R) systems to produce utility-grade, renewable energy that can be transmitted to the grid in a manner fully compliant with national and international standards.

The PB40 PowerBuoy is part of OPT’s ongoing program with the US Navy to develop and test the Company’s PowerBuoy wave energy technology. The project began as a Small Business Innovation Research (SBIR) program at the Office of Naval Research (ONR). Key program goals of the wave energy project include demonstrating system reliability and survivability, and the successful interconnection with the grid serving MCBH. The PowerBuoy was deployed on December 14, 2009 approximately three-quarters of a mile off the coast of Oahu in water depth of 100 feet. To date, the PowerBuoy has operated and produced power from over 3 million power take-off cycles and 4,400 hours of operation.


U.S. Military Orders Less Dependence on Fossil Fuels
By ELISABETH ROSENTHAL Published: October 4, 2010

With insurgents increasingly attacking the American fuel supply convoys that lumber across the Khyber Pass into Afghanistan, the military is pushing aggressively to develop, test and deploy renewable energy to decrease its need to transport fossil fuels.

Last week, a Marine company from California arrived in the rugged outback of Helmand Province bearing novel equipment: portable solar panels that fold up into boxes; energy-conserving lights; solar tent shields that provide shade and electricity; solar chargers for computers and communications equipment.

Even as Congress has struggled unsuccessfully to pass an energy bill and many states have put renewable energy on hold because of the recession, the military this year has pushed rapidly forward. After a decade of waging wars in remote corners of the globe where fuel is not readily available, senior commanders have come to see overdependence on fossil fuel as a big liability, and renewable technologies – which have become more reliable and less expensive over the past few years – as providing a potential answer. These new types of renewable energy now account for only a small percentage of the power used by the armed forces, but military leaders plan to rapidly expand their use over the next decade.


For more on the interesting origins of the looming China v Japan islands clash, for those with the time follow the links below. Blame it on the Brits, the bankers again, and the 19th century Opium Wars.

First Sino-Japanese war.

Diaoyu/Senkaku Islands

Graeme Irvine. London.