The following is an excerpt from Danielle Venton | May 11, 2012 | Wired.com |
The fight over the minerals that run the electronic world entered a new phase in March when the United States, the European Union and Japan collectively filed a case against China, accusing the rare-earth powerhouse of violating world trade rules to manipulate mineral prices.
At the heart of argument are 17 little-known elements with whimsical names like europium and praseodymium, that are found in everything from mobile phones and computers to smart bombs and large wind turbines. Traces of the metals can be found around the world, but rarely in high enough concentrations for mining to be convenient or profitable.
China now controls 95 percent of total rare-earth supply. A figurative sneeze on its export policy is all that’s needed to shake global markets, and in 2010 China began restricting rare-earth exports. International prices spiked, reaching near-dizzying levels last summer before crashing in the fall. In the wake of the World Trade Organization case, they’ve perked up again.
Foreign companies buying rare earths from China must now pay more than twice the rate paid by companies inside China. The tiered pricing encourages companies to move factories and jobs to China, where they can be sure of supply and lower prices. Beyond the extra economic boost for China, this has made it easier for Chinese companies to steal foreign intellectual property. Businessmen and politicians worry that China’s dominance over these 17 elements is a strategic vulnerability, discouraging innovation and threatening national defense.
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