In September 2010 China made the decision to stop shipments of rare earth to Japan. The stoppage lasted for two months. The breakdown in the international relationship came when Japanese authorities arrested a Chinese fishing boat captain whose boat had collided with two Japanese Coast Guard ships. The fishing boat and the Coast Guard ships were within the vicinity of a group of small islands that both countries lay claim to. The islands are known as the Senkaku Islands in Japan and the Diaoyu Islands in China.
Rare earth metals are a set of seventeen chemical elements in the scientific table. They are used in a wide variety of technology goods including monitors, DVD players, smartphones, tablet PCs such as the iPad, and especially in the nickel metal hydride batteries that are needed to run hybrid cars. They even have military uses such as in missile guidance systems. When supplies are cut off manufacturers can quickly run through their stockpiles.
China has been producing about 95% of the rare earths mined and sold around the globe with Japan being the biggest importer for the last several years. Although the USA actually has some of the largest known deposits of rare earth elements it has also been importing most of its rare earth needs from China since the 1990s , according to the U.S. Geological Survey, when Chinese companies increased production and drove down prices. U.S. mining companies found it hard to compete with these prices. However, with worldwide demand expected to grow from 125,000 tons in 2010 to 225,000 tons by 2015, the rare earth oxides facility at Mountain Pass, California is being reopened. The first phase of its mining project is expected to be operational by next year after nearly a decade of no production in the U.S.
China's dominance may soon be coming to an end though with Japanese scientists' discovery of huge deposits of the minerals in mud on the ocean floor in international waters near Hawaii. This discovery could expand the known deposits of rare earth materials by a thousand times. University of Tokyo associate professor Yasuhiro Kato has been quoted as saying, "The deposits have a heavy concentration of rare earths. Just one square kilometer (0.4 square mile) of deposits will be able to provide one-fifth of the current global annual consumption." Kato led the team that made the discovery. The finding is detailed in the scientific journal Nature Geoscience, and the deposits can apparently be easily extracted.