It’s one of the underappreciated news items so far this year, likely due to incredulousness. According to a recent, scientific study, researchers discovered several hundred years worth of rare earth metals. Estimates indicate that this newly discovered source could supply the world on a “semi-infinite basis.”
The one caveat? The rare earth metals were discovered in oceans within Japan’s exclusive economic zone. Specifically, the crucial commodities are situated “in a roughly 965-square-mile Pacific Ocean seabed near Minamitorishima Island, which is located 1,150 miles southeast of Tokyo.”
Primarily, the issue is that Japan hasn’t been relevant when it comes to commodities. As a result, its economy has been dependent on nations that can provide natural resources. In recent years, with Japan exploding as a technology hub, the choice resources are rare earth metals.
But like everybody else, China has a stranglehold on REMs. Japan is in a particularly precarious situation due to long-standing political conflicts. In 2010, those conflicts came to a head when China held back exports of rare earth metals to Japan.
But another consequence that affected other nations imports was higher prices. Technically, with less supply circulating in the global economy, demand logically rises. According to CNBC, REMs jumped by as much as 900%.
Thus, the recent news about the discovery of rare earth metals was taken with a serious dose of caution. Still, it’s hard not to get excited about the potential. Based on the study, the location holds “780 years’ worth of yttrium supply, 620 years of europium, 420 years of terbium and 730 years of dysprosium.”
Not only would this boost Japan’s economy, it could upend Chinese hegemony on these truly precious commodities. That’s something that the U.S. and its allies are hoping for. As China grows its own economy to astounding proportions, it’s been flexing its muscle in the process.
Obviously, that worries the U.S., and especially, the smaller Asian nations surrounding China.
The Japanese discovery could radically change that calculus. However, some critical challenges exist. For starters, taking rare earth metals and other commodities from the seafloor bed is no easy and cheap task. Over the next few years, Japanese-government backed entities will conduct a feasibility study to see if extraction makes economic sense.
Second, China isn’t going to take this discover lightly. They’ve been challenging international jurisdictions for some time, and they’re not going to stop now. It’s not out of the question that military standoffs would occur.
It’s incredibly speculative, but with improving technologies, in a few years, the rare earth metals could be sensibly extracted. If so, expect both Japan and the U.S. to shore up their military alliance to counter Chinese aggression.