Rare earths: the indispensable component

The Chinese are building long term industrial strategies – they are going for the indispensable rare earths, the little known materials that are used in high tech equipment and special products. The products are glasses, ceramics, catalyzers, powders, lasers, mobile phones, liquid crystals, solar panels, missile systems, defence equipment, phosphors….. World production is about 125.000 tons, of which the Chinese consume about 50%. Expected growth is about 10% per year.

The rare earths are 17 metals with special properties, like the lanthanides, lanthan, lutecium, yttrium, scandium.

Mongolia, Australia, Africa, Asia: the Chinese are there, and they are themselves by far the largest producer. The US and Japan are worried, exports are blocked, the prices are skyrocketing, and industries are at stake. There is illegal traffic in these products too. China and Japan are having contentions, and the Japanese feel the heat. Replacements are not possible in the short term. The industrialized West is being overtaken by the industrialized China?

A crisis is brewing as the Chinese are tightening supply, using it to gain advantages, increasing costs. Did the West sleep in class?

Could the West negotiate its way out of this one, or will there be tougher action? And the UN?

In one month – September to October 2010 – Chinese production is reduced by 75% – due to environmental and quality requirements – so where are we heading? Power play or just improving production facilities?

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