China Cuts Off World's Rare Earth Metal Supply
October 21, 2011 12:40 AM
The hand giveth, the hand taketh away
China only has about 30 percent of the world's rare earth metal deposits, but thanks to clever planning it today
controls 97 percent of the world's production of these scarce resources
. Deposits of this family of 17 elements --
vital to power electronics
found in televisions, smart phones, electric vehicles, and a variety of other devices -- are found in California, Canada, Australia, and Russia, but it will take years to bring them online.
In short the world is
at China's mercy
for now when it comes to rare earth supply. And China's biggest rare earth metal producer -- the Inner Mongolia Baotou Steel Rare-Earth (Group) has announced that it is severing shipments to the U.S., Japan, and Europe for one month in an attempt to artificially inflate prices.
Inner Mongolia Baotou Steel Rare-Earth also plans to buy rare earth metals in an attempt to further move prices upward. The company already controls 60 percent of China's rare earth production, thanks to the Chinese government's decision to merge 35 other local companies into the Inner Mongolia business, or fade them out.
China controls 97 percent of the world's rare earth metal production.
[Source: Wikimedia Commons]
While the Sichuan province in the southwest and Shandong in the east produce significant amounts of rare earth as well, the Inner Mongolia Baotou Steel Rare-Earth Group's decision should be enough to move prices significantly.
Doing so will benefit China in a couple ways. First, prices will almost certainly go up, reverse a downward slide. Lynas Corp., an Australian rare earth producer reveals that since June the price of neodymium oxide has declined 34 percent to $157 per kilogram, while europium oxide is down 35 percent at $2,904 per kilogram.
Sun Fan, a rare earth analyst for Goldstate Securities in the southern city of Shenzhen comments in a
, "The impact on the market supply will be substantial. The dual measures of suspension and purchase will offer support for the rare earth prices and make the prices gradually pick up in the future."
Aside from raising prices higher, the pause in production will allow China to try to kick start its efforts to produce locally produce magnets. When it comes to the production of the magnets used in the electric motors of hybrid and electric vehicles, typically the biggest profit is not realized at a commodity level, but at a magnet producer level. Thus in the past foreign nations like the U.S. and Japan have pocketed the biggest profits. China
hopes to change that
China hopes to supplant its U.S. and Asian rivals as the main producer of electric motor magnets, by choking resource supply to its foreign competitors. [Source: ThinkGeek]
China's Ministry of Land and Resources in September bragged that rare earth metals were the nation's "21st century treasure trove of new materials." It argued that exports should be tightened, choking foreign supply and favoring Chinese manufacturers.
"Well, we didn't have anyone in line that got shot waiting for our system." -- Nintendo of America Vice President Perrin Kaplan
China's "Rare Earth" Cuts Threaten Electronics, Power, and Auto Industries
December 30, 2010, 12:32 PM
China Quietly Looks to Strangle U.S., Japanese EV Production
October 21, 2010, 11:00 AM
China's Stranglehold on Rare Earth Metals Could Choke EV, Hybrids
April 30, 2010, 11:41 AM
Hybrids, EVs More Dangerous to U.S. Security Than Foreign Oil, Says Expert
April 19, 2010, 11:31 AM
Dubai announces passenger drone plans.
February 14, 2017, 7:56 AM
Lucky LA Residence
January 28, 2017, 4:00 AM
Debuted at CES 2017 - Corning Gorilla Glass Concept Car
January 7, 2017, 3:02 AM
Happy, healthy and feastive New Year to you and everyone in the world that about to celebrate the Season Holidays
January 1, 2017, 12:01 AM
In 2017, Here are the New Autos of 2018
December 30, 2016, 5:00 AM
What Happens When You Put a Blind Man in a Driverless Car?
December 14, 2016, 5:00 AM
Most Popular Articles
OnePlus 3T – 5.5” Optic AMOLED and Dash Charging Technology
March 23, 2017, 8:45 AM
Gigabyte GA-Z170X-Gaming G1 – Intel Thunderbolt 3 Certified Motherboard
March 9, 2017, 6:25 AM
Huawei P8 Lite 2017 – Android 7 Nougat Smartphone with Octa-Core Processor
March 8, 2017, 7:03 AM
Lenovo ThinkPad T460 - Ultra-Thin and Feather-light
March 3, 2017, 6:00 AM
Nokia has ditched this camera technology in its new smartphones
March 7, 2017, 8:45 AM
Latest Blog Posts
Android Creator and New Bezel-less Smartphone
Mar 29, 2017, 10:28 AM
More Apps From Google
Mar 28, 2017, 7:15 AM
Are you thinking of performance and speed? Intel claims:
Mar 25, 2017, 7:45 AM
Apple buys an automation app called Workflow. The deal was completed today and brings the app along with its developers.
Mar 23, 2017, 7:35 AM
Apple Announces new color for iPhones and iPads
Mar 22, 2017, 7:45 AM
Instagram: You Can Now Save Live Videos For Later
Mar 21, 2017, 7:49 AM
Samsung Galaxy S8 to Get New Color Scheme
Mar 20, 2017, 7:45 AM
What else to worry about?
Mar 17, 2017, 6:45 AM
Icon of the Day: Intel/ NVIDIA or Mobileye
Mar 16, 2017, 6:15 AM
JUST IN - Twitter Hijacked : High-Profile Account Accesses
Mar 15, 2017, 7:07 AM
Mar 14, 2017, 7:30 AM
News and Tips
Mar 13, 2017, 6:30 AM
iPhone 8 – May Not Get Curved Screen
Mar 11, 2017, 8:00 AM
California paves way to self-driving car tests without humans
Mar 11, 2017, 7:18 AM
Smart Machines V hackers
Mar 10, 2017, 7:00 AM
Uber Can Resume Autonomous Car Testing in California
Mar 9, 2017, 6:50 AM
Mar 8, 2017, 7:09 AM
Mar 7, 2017, 8:45 AM
World news 3-6
Mar 6, 2017, 5:40 AM
Mar 4, 2017, 7:40 AM
Mixed News of the Day
Mar 4, 2017, 6:32 AM
Jaguar Land Rover invests in ride-sharing
Mar 3, 2017, 7:00 AM
More Blog Posts
Copyright 2017 DailyTech LLC. -
Terms, Conditions & Privacy Information