Source: AFP, Business Week                     Date: 12 October, 2011

German Chancellor Angela will concentrate on striking a deal for a source of rare earths on her trip to Mongolia this week. The chancellor is taking a tour through Asia that will take her to both Vietnam and Mongolia in light of their fast economic growth and resource opportunities. Merkel's visit will be only the first visit to Mongolia by a German chancellor."Mongolia is a country very rich in raw materials and we have a very, very good chance to improve our cooperation in this field," Merkel said.German firms have said they are interested in concluding agreements on rare earths in Mongolia. Rare earth elements are a collection of 17 different substances needed for the manufacturing of high-tech hardware and equipments such as mp3 players, hybrid engines, and wind turbines. German is leading the efforts of Europe, the U.S., and Japan to open new sources for rare earths. Currently the Chinese have a stranglehold on the market. China produces more than 90 percent of the world's rare earths, but has significantly reduced production and exports. Merkel has pledged to Nicolas Sarkozy to recapitalize European banks as the two leaders struggle to create a solution to end the euro crisis for the long-term.

“There's the danger that we could get an iron-ore OPEC or a rare earths OPEC,” said Minister Rainer Bruederle last year during a visit to Canada in hopes of a identifying a new source of rare earths, comparing a potential monopoly of rare earths by Canada to the Organization of Petroleum Exporting Countries.Mongolia's potential for rare earths is enormous and Germany is confident it can outline an agreement to allow companies to sign individual contracts ensuring access to the materials, said an official. The official cited Munich-based Siemens AG, Europe's largest engineering company, which is apparently in need of rare earths for turbines. Germany companies may offer infrastructure and clean-energy investments in return.