Processed Rare Earth Metals
In the latest move to gain further control over the lucrative rare earth metals that are so important to many of today’s high-end electronic processes, China has been building storage facilities and bringing mines under government jurisdiction.
It is thought that China controls well over 90% of the world’s existing resources of rare earth metals, and with a viable new mine taking approximately a decade to get up and running, it seems that China will hold the trump card for a long while.
Rare earth metals, or elements, such as neodymium and dysprosium hold certain electromagnetic or chemical properties that make them extremely useful, indeed indespensable in certain cases, to many high-end industrial processes such as lasers, x-ray imaging devices and computer memory. Although seemingly specialist, other uses translate to everyday applications such as fuel cell batteries and flat screen TVs.
Although China holds such a large majority of the Earth’s reserves, it only theoretically should account for below 40% of all ‘proven’, or known, reserves. The trouble is that extraction and mining is expensive and timely, as the metals are generally dispersed over large areas or occur in difficult to access veins of ore. The risk of toxins, often radio-active, being released into the environment is also an associated problem and cost, as well as the fact that extraction also requires multi step processing.
Companies in Australia and Canada have been making progress in setting up mining operations, but with the timescales involved, the price of rare earth metals is set to continue to rise as China reduces export quotas and hikes prices.
Although the stockpiling of these assets are something that other nations are keeping a wary eye on, and indeed are doing themselves, to a degree – the US, Japan and South Koreans are building their own smaller stockpiles – China does seem determined to benefit from them as long as they can. However, some analysts believe that it is not possible for China to hold the rest of the world to ransome over these precious goods. There are far too many other economical factors at play which could be used against China in a time of crisis, but the hoarding is definitely starting to open other government’s eyes to the need for gaining and building a national reserve.
