Mineral Trade War Looms In East Asia

The Senkaku/Diaoyu Islands dispute
is a continuing source of tension
between Japan and China.

NEW SOUTH WALES, AUSTRALIA (THE AUSTRALIAN)--Due to the recent flare-up of a territory dispute between China and Japan, China is reportedly planning to halt all rare earth sales to Japan. Japanese companies are scrambling to find alternate sources, which shows in recent deals with companies like Lynas Corp and Alkane Resources. Unfortunately these sources have lower concentrations of  heavy rare earths such as dysprosium and neodymium that Japanese companies require to make everything from wind turbines to handheld electronics. In light of China's recent attempts to corner the global gold market, experts are also keeping watch on gold prices. Source: Rare earths a victim of Japan-China islands spat (Reliability: Medium)

Comment: China enacted a similar rare earth embargo on Japan in 2010, causing the price of some rare metals to more than triple. Two years later but still with few alternate sources for the heavy rare earth metals, Japan again faces potential shortages. Alkane Resources' Dubbo Project does contain heavy rare earths, but since Japanese companies will be required to process the metals in Japan it will almost certainly take a few years to develop before it significantly affects global prices.

Japan And France Move Away From Nuclear Power

President Hollande confirmed his campaign
pledge to cut nuclear power in France from
75 to 50 percent by 2025 

 LONDON (REUTERS) -- Prime Minister Yoshihiko Noda announced Japan would pull out of nuclear power by the 2030s and triple the share of renewable sources to 30 percent of its energy mix. In Paris, President Francois Hollande's Socialist Party promised to reduce reliance on nuclear power in the world's most nuclear dependent country. At the same time Hollande urged the European Union to set tough targets for cuts in greenhouse gas emissions for 2030 and 2040. The moves by the two countries come in response to the Fukushima accident from 2011. Although in the short term, the difference will be made up from fossil fuels, eventually both countries plan to shift to more environmentally friendly technologies. President Hollande will call for a 40 percent reduction in CO2 emissions by 2030 and a 60 percent reduction by 2040 at the EU Level. Source: http://in.reuters.com/article/2012/09/14/energy-nuclear-idINL5E8KEJEB20120914 (Reliability: High)

Comment: In order for the EU to meet Hollande's targets, the countries will likely move away from fossil fuels into renewable resources. With Japan and France moving away from nuclear power, demand for rare earth metals vital for use in renewable energy sources will likely increase. Japan's goal of 30 percent renewable power likely will come in the form of hydroelectricity and geothermal, due to the limited space available on the island.