The World Trade Organization (WTO) has ruled against China on that nation’s rare earth elements’ (REE) export restrictions, which have resulted in the huge economic power cornering the market in substances critical for advanced industrial production.

The Financial Times, reporting the ruling, stated the WTO said Beijing had for years used trade policy to control key markets for strategic commodities and encourage manufacturers to move their operations to China.

Rare earth minerals are vital to the production of smartphones, cameras, steel and hybrid cars, making the WTO ruling a significant victory for the US, EU, and Japan.

Deep sea mining advocates in Bermuda say the island’s Exclusive Economic Zone’s sea floor is rich in rare earth elements — so rich that at today’s prices the value of some substances could reach into the billions of dollars.

Nick Hutchings, who has been exploring Bermuda’s waters for mineral resources for more than a decade, explained: “The rare earth elements are in polymetalic nodules on the ocean floor at between 4,000 to 5,000 meters, and cobalt crusts on the seamounts at between 800 and 2,400 meters.

“What is very important is that China controls rare earth elements, and that they are critical for western technology and defence.

“The fact is the western economy is looking for new sources of rare earths — without them, we would have no planes, no television and satellites,” he said.

Today, China accounts for 90 percent of the world’s production of the 17 elements — including lanthanum, tungsten, neodymium and molybdenum — collectively known as rare earths, reported The Financial Times, and added the WTO ruling had been welcomed by trade officials in the US, Japan and Europe, who had complained the export restrictions gave an unfair advantage to Chinese companies.

Beijing’s restrictions were introduced in 2009 and caused a surge of as much as 500 percent in prices around the world in 2011, along with fears of global shortages.

At the same time there was a flurry of new investment in rare earths mines in places such as the US and Australia, aimed at breaking Beijing’s stranglehold, The Financial Times said.

Mr Hutchings pointed out, for example, industrial giant Lockheed Martin has joined forces with the UK Government to explore the ocean floor in the Pacific Ocean between Mexico and Hawaii in a search for minerals.

“This is a very important fact. The deep sea mining industry is an emerging industry,” he said.

A Bermuda-based senior engineer and technologist added: “Rare earth metals are in almost everything we use. The average cell phone probably contains four grams, cars contain a lot in permanent magnet motors, glass finishes and processor components. Our best green technologies such as solar panels and wind turbines rely on ever increasing volumes to achieve greater efficiency. Rare earth ores are often radioactive and processing can be highly toxic.

“Today, 90-plus percent of all rare earths are currently mined in China where there are poor environmental controls and workers pay with their health. For the sake of the environment we should be extracting a portion of these essential metals in controlled areas, preferably where strong environmental scrutiny is exercised.

“Privileged Western consumers need to pay the real price for their lifestyle, including an appropriate share of the cost and environmental impact.

“Part of the required balance means we should be extracting selected minerals locally to make a contribution to the global health of the world.”

Mr Hutchings added that deep sea crusts and nodules found in Bermudas waters are not radio active.

He has recently been in exploratory talks about financing deep sea mining. “A London banker I talked to last week said: ‘Put simply, if a large mineral source of wealth is found in Bermuda, of the magnitude of multiples of GDP, then the country would become an extremely good investment proposition. It would be able to refinance its loans at much cheaper rates. The interest burden might drop by tens of millions per annum.’ ”

He said: “The consensus is we are five to 10 years away from viability. Some early high profile projects are probably before that point, but essentially the industry will be moving to viability within five and 10 years. So it’s time for us to take it seriously — it’s just around the corner.”

In the UK, the Deep Sea Mining Act is in the process of being changed to include crusts, because crusts have a higher rare earth element content and are not as deep as nodules, Mr Hutchings said. Engineering and Technology Magazine, reporting in February that the UK Government wants an open door to deep sea miners looking for the minerals, said Foreign Office spokesman Lord Wallace of Saltaire stated that amendments to existing deep sea mining laws would show the UK is willing to do business internationally and would prevent it from losing out to other states which welcome firms.

Lord Wallace told the Lords: “The Government would like to have an open door to any contractor who wishes to explore for any of the mineral resources of the deep sea bed. But under the 1981 Act as it stands we could not give a licence to a commercial company that wishes to explore for cobalt-rich crusts or polymetallic sulphides.”

Mr Hutchings said Sir Richard Gozney, Bermuda’s previous governor, who was a geologist by profession before joining the UK diplomatic corps, had noted that Bermuda is continually reinventing its economy.

“In a speech just prior to leaving Bermuda, he predicted that our grandchildren will be exporting rare earths to China.

“He was in a position to know — we probably should have been paying closer attention,” he said.