Tensions between China and India are nothing new. The two BRICS countries remain deadlocked on issues such as the border dispute over Arunachal Pradesh and Aksai Chin, Chinese naval activity in the Indian Ocean and Sino-Pakistani relations. Economically, the two emerging giants are also stamping their influence on Asia, often stepping on each other’s toes in a delicate half-wrestle, half-waltz—a race for influence in which China is often more proactive.
Asian countries, many of which are increasing military spending, have bound together in an effort to stave off dependence on China’s REMs. The most unlikely of these alliances has been on the Korean Peninsula. North and South Korea met in November 2011 to discuss joint exploitation of Pyongyang’s rare earths, which some estimates put at six trillion dollars. Yet investment in heavy industry in North Korea has been less than attractive for even Pyongyang’s closest allies, as demonstrated by the failed venture of Chinese firm Haicheng Xiyang Group. Meanwhile, Japan has also engaged in talks to jointly develop Myanmar’s REM deposits.
In recent years, South Korea and Japan have collaborated to stockpile and share energy resources to ensure the security of energy imports. Such resource sharing agreements may very well be applied for rare earth minerals in the future. In 2011 Rep. Mike Coffman (R-CO) introduced the RESTART (Rare Earths Supply Chain Technology and Resources Transformation) Act into the U.S. House of Representations. The Act, which wasn’t passed during the just concluded session of Congress, included a provision that called for creating a national stockpile organized under the U.S. Department of Defense, a proposal which has been floated a number of times over the past few years. After years of foreign reports, in July 2012 the state-owned China Securities Journal said that China had begun stockpiling REMs, without specifying when the initiative began.
India, however, isn’t in a position to stockpile the resources. Instead it has begun to boost production and exploration to try and meet domestic demand. In Orissa, a new 10,000 ton REM processing plant is expected to be operational by early next year. The U.S. $25 million plant is expected to process 4 percent of global production of Monazite. Much of this will be used to meet domestic demand.
India and China have both begun offshore exploration for REMs. Production from deep-sea mining is still years away, some estimates say 2030-2040, if it is viable at all. Many experts liken the idea to trying to mine a moving asteroid. Despite the inherent and costly problems, China paved the way for such exploration and won exploration rights from the International Seabed Authority to a 10,000 sq kilometer block in the Southwest Indian Ocean. India followed suit. New Delhi is spending U.S. $135 million to buy a new exploration vessel, hoping to complement its small onshore resources with offshore mining. A cross-disciplinary team, including space and nuclear energy engineers, will develop India’s offshore mining capacity. According to India’s Minister for Earth Sciences, Ashwani Kumar, the program will address the country’s “critical and strategic needs.” Kumar was quoted by local media as saying that, "Countries like China have taken to deep-sea mining with a strategic purpose." India, for its own strategic purposes is forced to do the same.