Just one planet like it

January 29, 2011 7:15 AM

Electronics companies all over the world are increasingly reliant on certain rare metals, most of which are mined in China, which controls 97 per cent of the global supply. The Chinese government has promised to slash export quotas to ensure future sustainability of the world's supply of rare metals. China will drop its quota by 35 per cent in the first half of this year as compared with the same time last year. But despite its escalating consumption of rare metals and the need for future sustainability, the West's electronics industry is mistrustful of China's motives and claims that the move has more to do with the mainland's desire to dominate electronics manufacturing than ensuring the future sustainability of the world's supply of rare metals. ~ Greening conscience or resource checkmate? The rare earth trilogy covers eWaste harvesting, restarting interest in mines and dithering around trade regulations, all in one neat package.

Previously buried linkdeep in November 2009 "Rare Earth: The new Great Game" which ends almost presciently so:

The FT's Martin Wolf reminds us we are stacking up a potentially huge conflict between the US and China over trade and currency - and these two issues are what dominate the thinking of free-market, Western-trained economists when they think of China.

But it seems to me that the West has been largely blindsided by the growing importance of resource strategy. While the West was thinking about one thing, the big Asian industrial powers were thinking about another.

posted by infini (18 comments total)

If you've ever driven from Los Angeles to Las Vegas along the 15, you will see an exit for Zyzzyx road.

It's one of the few Rare Earth Mines in the US. It was closed for years and years and is finally reopening this year because of events just like this.

Just a random bit of trivia.
posted by Lord_Pall at 7:19 AM on January 29, 2011 [2 favorites]

I bought some rare earth magnets from Amazon a few weeks ago; they are absolutely fantastic.
posted by paisley henosis at 7:24 AM on January 29, 2011 [1 favorite]

That last link on the Great Game is the best thing I've read yet on sources of rare earths outside of China. What I got from it is there are a few mines in other countries that haven't been viable because Chinese export prices were so low. If the Chinese supply starts to get squeezed, presumably other mines might open to fill the market.
posted by Nelson at 7:40 AM on January 29, 2011 [1 favorite]

The US has huge amounts of rare earth metals [pdf], and other friendly countries (e.g. Australia, India) have large reserves as well. Our own reserves are equal to over 100 years of China's current production levels.

Yes, Chinese rare earths are cheaper because a) a lot of them are used in China to manufacture stuff so shipping costs are lower and b) their environmental and mine safety laws are terrible. So it would be more expensive to mine them here or in other countries, but it could be done. And, in fact, US mines are opening back up in response to China's actions.
posted by jedicus at 7:44 AM on January 29, 2011 [4 favorites]

I can't recall in which link it was that I read something to the effect of "whether by stupidity or design, China flooded the market with extremely low cost rare earths leading to the closure of far more expensive mines in other locations" and then, apparently, whammo. Go anyone?
posted by infini at 7:46 AM on January 29, 2011 [1 favorite]

"whether by stupidity or design, China flooded the market with extremely low cost rare earths leading to the closure of far more expensive mines in other locations"

I vote design.
Sort of along the lines of drug-dealer economics..."The first one's free, kid"
posted by Thorzdad at 7:59 AM on January 29, 2011

Unfortunately, I can't spare the time to find the link, but NPR (ATC?) recently did a story about e-waste, and how these precious metals were exported with our (I'm in the USA) junked gadgets and burned in places like Ghana by children in order to extract them.

The story was based in the ethics of exploitation of humans and environmental damage, but didn't touch on this aspect much at all. Not at all, I think.

Which is a shame, because they interviewed some electronics industry muckity-muck who claimed that it would be possible (but somewhat expensive) for the industry to switch away from using these metals at all, but that they didn't have the motivation.

Not that I want to diminish the potential future profits of the mining companies (they bring so much good to the world, I'm sure we all agree) but perhaps this could motivate the electronics industry at least to figure out how to abandon these materials at all. Then they just have worry about what they'll do to replace plastic once the oil runs out.

Or he was lying, which is also possible.
posted by illovich at 8:07 AM on January 29, 2011

Rare earths are not exceedingly rare, nor very profitable. China has the only mines because they have super low labor costs and zero environmental regulations. Thus they have essentially flooded the market and driven higher cost mines out. As prices rise mining in the US has begun to recover. What we need are international encironmental regulations that can be uniformly enforced throughout the supply chain.
posted by humanfont at 8:12 AM on January 29, 2011 [10 favorites]

Is this it, illovich? Previously
posted by Bangaioh at 8:15 AM on January 29, 2011

humanfont: Rare earths are not exceedingly rare, nor very profitable. China has the only mines because they have super low labor costs and zero environmental regulations. Thus they have essentially flooded the market and driven higher cost mines out. As prices rise mining in the US has begun to recover.

This really captures it all. There is no crisis in rare earths. There is only a temporary shortage due to a market failure in the economy.
posted by JackFlash at 8:57 AM on January 29, 2011

This really captures it all. There is no crisis in rare earths. There is only a temporary shortage due to a market failure in the economy.

Besides, aren't almost all of these rare earth metals elements? We mine them now because it is cheaper and easier but it isn't like they get used up in the way that petroleum does. If we can get the international regulations that Humanfront suggests (and I agree that they are sorely needed), it would only be a matter of time until recycling electronics to reclaim their rare earth metals becomes the lower cost alternative.
posted by VTX at 10:11 AM on January 29, 2011

"Rare earth" metals are not rare. They're just called that.

As defined by IUPAC, rare earth elements or rare earth metals are a collection of seventeen chemical elements in the periodic table, specifically the fifteen lanthanoids plus scandium and yttrium.[2] Scandium and yttrium are considered rare earth elements since they tend to occur in the same ore deposits as the lanthanoids and exhibit similar chemical properties.

Despite their name, rare earth elements (with the exception of the radioactive promethium) are relatively plentiful in the Earth's crust, with cerium being the 25th most abundant element at 68 parts per million (similar to copper).

They are mostly mined by the Chinese because no one else was really that interested in doing it, but now that they are cutting off exports mines are starting to be re-opened in the U.S.
posted by delmoi at 10:27 AM on January 29, 2011

Quite apart from the scarcity or otherwise, boo-hoo. I don't see how the Chinese government owes everyone else the chance to build a manufacturing economy on top of cheap exports of raw materials, even if countries like Australia and New Zealand are dumb enough to go that route.
posted by rodgerd at 11:01 AM on January 29, 2011 [1 favorite]

There is only a temporary shortage due to a market failure in the economy.

This wasn't a market failure, this is how unregulated markets work.

Undercut your competition, drive them out of business, and then jack up prices when you are the only game in town.

Just wait till Wall Mart finally puts your local suppliers out of business.
posted by dibblda at 12:02 PM on January 29, 2011

As soon as mining opens up in the U.S. again, China will undercut once more. If the mine manages to stay in business, China will buy it.
posted by dibblda at 12:04 PM on January 29, 2011

I don't see how the Chinese government owes everyone else the chance to build a manufacturing economy on top of cheap exports of raw materials, even if countries like Australia and New Zealand are dumb enough to go that route.

Because they're a member of the WTO and there are certain obligations that they've agreed to as a condition for membership that they're violating with their various actions concerning rare earths.

China initially justified its restrictions on exports of the lanthanides as a measure to encourage companies using lanthanides to relocate to China. Article XI of the General Agreement on Trade and Tariffs generally prohibits export quotas unless they fall within the exceptions set forth in Section 2 of Article XI or Article XX. Not surprisingly, efforts to distort international trade by forcing companies to relocate to the country imposing the quota is not within the exceptions set forth in GATT.


Text of GATT

Chinese officials are now desperately trying to avoid a WTO case against China for its efforts to lock down the rare earths market (which is why we're seeing China try to implement some belated efforts re environmental protection at long last).

This article has more information about the current status of the steelworkers union section 301 petition re Chinese rare earths that was filed last year and how it may impact any WTO case the U.S. may file against China in Geneva.

This really isn't a case of the world picking on China. If they want the "free trade" benefits of belonging to WTO, they really need to play by the same rules that all the other member states follow.
posted by longdaysjourney at 12:22 PM on January 29, 2011

Let's just go to the moon and start mining that.
posted by slater at 12:47 PM on January 29, 2011

Let's just go to the moon and start mining that.

Yes, because going to the moon is so much easier than driving 50 miles outside Las Vegas and literally shoveling ore into the back of a pickup truck.
posted by JackFlash at 3:43 PM on January 29, 2011