Germany changes rare minerals strategy over China spat

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Germany changes rare minerals strategy over China spat

Germany has unveiled a new strategy to help firms in Europe's top economy obtain vital minerals, amid concern that China is curbing exports of rare earths crucial for high-tech industries.


Economy Minister Rainer Brüderle this week said that securing a reliable supply of these minerals, used to produce goods from iPods to hybrid cars, was of "pivotal importance" for Germany as an industrial power.

While individual companies are responsible for sourcing their own minerals, the government would back them up with foreign policy measures, Berlin vowed.

"Part of the raw materials strategy is building up partnerships with selected countries," the German government said in a statement, without saying which nations were involved.

Japan has accused China, which has cornered 95 percent of the rare earths market, of restricting shipments amid a bitter spat between Asia's top two economies sparked by a maritime incident in disputed waters six weeks ago.

Beijing has cut rare earth exports by five to 10 percent a year since 2006 as demand and prices soar, but strongly denies making any fresh cuts.

Earlier Wednesday, Chinese authorities lashed out at a report in the official China Daily, which cited a commerce ministry bureaucrat as saying Beijing would cut quotas by up to 30 percent next year.

"China will continue to supply the world with rare earths," Beijing insisted.

The New York Times has reported that the United States and Japan are considering filing a case against China at the World Trade Organisation.

On a visit to Asia this month, Brüderle pledged to help Japan gain access to rare earths and said Berlin and Toyko would examine joint efforts to explore new sources for the minerals.

And Chancellor Angela Merkel said in a speech last week that Europe must formulate a policy to ensure a steady supply of minerals.

"In Central Asia, there is a broad spectrum of interesting deposits, including of rare earths which we need for things like electrical batteries," said the chancellor.



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