REEs and the World Economy
Source: Rare Earth Investing News, Michael Montgomery (10/6/10)
"REE restrictions only fuel innovation in the high-tech industry."
The situation illustrates the immense power that these elements have over the world economy. While the market is small in relation to other minerals, such as iron and copper, the monopolistic power of China over this market leaves little option for countries and companies alike to give in to the whims of China.
Much has been made over the restrictions on export quotas from China. The Chinese insist that the reduction in mining and exports are due to not only illegal mining operations, but also environment concerns. The only option for World Trade Organization (WTO) rules over barriers to trade. While the Chinese insist that the trade restrictions to Japan were not directly related to the boat captain's detainment, there seems to be a trend in Chinese diplomatic relations to rare earth policy.
The restrictions on rare earths are only fueling innovation in the high-tech industry.