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China’s Stranglehold on Rare Earth Ores - The Repercussions

Friday, April 22nd, 2011

Rare Earth Elements – REEs – are making headlines of late, and for all the wrong reasons.

Even a year ago discussion of rare earth elements remained confined mostly to academic and technical discussions among manufacturers of sophisticated devices such as cell phones and laptops. REE s are also used in the manufacture of cruise missiles, precision guided missiles, reactive armor as well as radar systems. And they are also the driving force behind most green technologies today. The most important civilian applications for rare earth elements are for use are in wind powered turbines as well as plugin hybrid vehicles. Oil refiners use rare earth materials as catalysts.

What are rare earth elements?

Rare Earth Elements are elements with atomic number 51 to 75 on the Periodic table and known generically as Lanthanides. Scientifically all rare earth elements are classified into two categories, namely, light rare earths and heavy rare earths.

The first category includes lanthanum, cerium, praseodymium, neodymium and samarium, and they are available more abundantly. The second category comprises the heavy rare earth elements of atomic numbers 64-71 and yttrium. However, these are quite rare, and are used only in very sophisticated and high end applications such as Erbium for fiber optics and communication hardware. Europium and Terbium work as phosphors and Gadolinium is used in MRI devices.

Why are they so important?

Rare Earth elements are ideally used in critical sectors as well as in every electronic gadget we use in our everyday lives. Therefore, the requirements for these elements are insatiable. These are abundantly available on the entire earth’s surface but in negligible quantities. They are also present in different percentages in minerals, and extractions from these sources are intensive and very expensive. On the surface of the earth, Bastnaesite is one of the primary minerals in which the more useful light earth elements are available in appreciable quantities in China and the US . Another popular mineral source is monazite and this is found abundantly in S.E. Asia, Brazil and India. However the percentage of rare earth elements gained from secondary sources is almost negligible.

Why is Chinese rare earth important?

China has 97% of the most valuable REE s and is with each year lowering the percentage it releases while increasing its own consumption. Most countries are rankled by the economic embargo that gives China a political upper hand in the global Balance of Power. The global demand is expected to soon reach 200,000 tons per year. In 2008, China produced 139,000 tons only. Japan has been the most affected but it has been shopping around for alternative sources and has found effective resources in Australia. The U.S. is also leveraging its own stocks but wants to buy more from China.

Currently, this all benefits China, as it refuses to release further REE s, thereby creating an artificial demand and supply mismatch. The repercussions are multifold, with the most important being economic monopoly with the aim of gaining wrongfully at the cost of development of other countries, especially Japan.

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