Obama may discuss rare earth policy with Chinese president

President Obama and Chinese President Hu Jintao may discuss access to Chinese supplies of rare earth elements used in energy technologies when they meet November 11, a senior White House official said Thursday.

The issue may also come up when Secretary of State Hillary Clinton meets with State Counselor Dai Bingguo in coming days during her trip to Asia, said Jeff Bader, senior director for Asian affairs at the National Security Council.

The potential talks come amid conflicting reports of export restrictions and planned cutbacks from China, the world’s dominant supplier. Bader’s comments show that the issue is receiving attention in the highest ranks of the Obama administration.

“I think it’s likely that the issue will come up in either or both [meetings]. I can’t say for sure,” Bader said at a briefing. 

Bader noted comments this week by a senior Chinese official who said China would not use the materials — which are used in a variety of industries — as a bargaining chip for international leverage.

“I noticed a report today on a statement by the spokesman for the Chinese Ministry of Industry and Technology asserting that China is not manipulating or seeking to manipulate exports of rare earth. We’ve seen lots of reports over the last month or two indicating there have been constraints on Chinese exports. The facts are murky,” he said.

“The goal is to ensure that the international market functions without hindrance in ways that satisfies the needs of major producers in the U.S. and elsewhere,” Bader added.

The New York Times, citing four rare earth industry officials, reported that, “The Chinese government abruptly ended on Thursday its unannounced embargo of exports of crucial strategic minerals to the United States, Europe and Japan, although shipments to Japan still encountered some difficulties.”

Clinton also said this week that concerns about Chinese exports show the need to diversify the sources of supply of rare earths, which are used in a range of high-tech and defense applications.

Obama and Hu will meet in Seoul, South Korea ahead of the Nov. 11-12 G20 summit.

Sen. Kirsten Gillibrand (D-N.Y.) is urging Obama to raise issues of access to rare earth elements at the G20 summit.

“It is critical to America’s national security interests, jobs in many of our existing and emerging industries, and our global climate change goals that fair, sustainable, and open access to [rare earth elements] be ensured. As you know, actions by China have raised concerns around the world that trade in rare earths might be significantly curtailed,” she wrote in a letter to Obama Thursday.

“The G-20 meeting presents a timely opportunity for global leaders, who have already begun to address trade-surplus and trade-deficit issues in this venue, to tackle this latest and very significant risk to fair trade and economic growth. In Seoul, G-20 leaders can commit to enhanced cooperation on global production and supply measures, diversification of resources, adoption of best practices to promote recycling of REEs, and research and development of innovative industrial processes that are less damaging to the environment,” the letter adds.