Rare earth shortage prompts supply security action

With tensions over rare earth trade showing no signs of abating, DEFRA says that it is important to raise awareness of the threat to the supply chain.

Last week DEFRA launched a bid to increase recycling of the materials as a means of buffering against further potential price rises, following ongoing battles to increase Chinese quotas.  This followed concern that UK businesses could be affected following supply disruption since 2010.

“We know larger businesses are already aware, and taking action to address risks in their supply chains,” a DEFRA spokesperson told TechEye, “but the smaller businesses or those further down the supply chain may not be aware of the risks for some of the materials they use.

“In the case of SMEs they’re less likely to have considered resource efficiency etc as a way of reducing risk.”

With the ongoing WTO discussions with China over trading of rare earths, DEFRA is hoping for an agreement that will enable easier trading of the minerals.

China produces the overwhelming majority of rare earths, which despite the name are in fact plentiful.  But with China reducing the quotas of REs available to foreign countries, ostensibly for environmental reasons, the EU and US have taken the problem up with the WTO.

DEFRA says it hopes for stability resulting in a trade agreement, in order to help firms which use rare earths in manufacturing.

“We are supportive of the WTO case as we support free trade,” DEFRA says. “However we cannot speculate on what the result of this resolution will be.”

“China owns over 95 percent of world production of RE – we only import it in raw form in very small quantities but it’s contained in many of the products we import.”

“It can be significant for importers in the UK but probably more so for those companies for whom RE is in a component of manufacture.”