Japan Strikes REE Deal with Vietnam

Source:

"Japan will help Vietnam explore and survey its northern provinces."

In the midst of what's been shaping up as an undeclared rare earths standoff between China and some of its biggest customers in Japan and the West, Vietnamese and Japanese leaders have decided to collaborate in the exploitation of northern Vietnam's rare earth elements (REEs). The deal was hammered out between the two nations' prime ministers during a meeting on Sunday.

Two weeks ago, it was further reported that China had expanded the rare earths suspension to include the U.S. and Europe. China exports more than 95% of the world's supply of REEs, which are necessary materials for the manufacture of a vast variety of modern goods.

Japan's decision to seek out non-Chinese sources of rare earths comes as the Geological Society of America considers the role of rare earths in an alternative energy future at the group's annual meeting on Tuesday.

Because the U.S. hasn't tapped its domestic resources of rare earths—and won't be able to produce an independent supply chain for at least fifteen years according to GAO estimates—any shift to an alternative energy economy would simply trade one foreign dependency for another. That could set the stage for trade wars as China needs more of its neodymium, gallium, zinc, lithium, and various rare earth elements to pursue its ambitious alternative energy plans.

Japan will help Vietnam explore and survey its northern provinces for future REE exploitation and help the Vietnamese develop environmentally friendly technologies for extraction and processing of the elements, but at best it would be a few years before meaningful production and export would begin. The U.S. will keep seeking out rare earths at home and keep leaning on China to keep the exports coming. And global economies will keep its fingers crossed that China does so.

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