China’s monopoly on rare earth metals could choke economies across the worldby Robin Powell / November 18, 2009 / Leave a comment
The Molycorp Minerals mine in Mountain Pass, California
Cast your eyes down to the lower reaches of the periodic table, and you find a row of exotic-sounding elements that you probably never got to in chemistry lessons. Here lie 17 elements known as rare earth metals, a group consisting of lanthanides (atomic numbers 57-71), scandium (21) and yttrium (39)—the latter owing its name to the similarly unpronounceable Swedish town where it was discovered in the late 18th century. Yet rare elements are not quite as unusual as their names might suggest. In fact, they are everywhere: in your mobile phone, hard disk drive, iPod headphones, plasma television, and hundreds of other electronic and industrial products. And now their supply is under threat.
Global demand for these metals has more than doubled over the past decade, as ever more devices make use of their unique properties. Rare earth phosphors in your television screen make the colours bright, while super-strong rare earth magnets allow electric motors to be compact enough to fit in a car, and headphones small enough to fit in your ear. Japan manufactures many of these goods and is the world’s biggest importer of the metals. The car giant Toyota aims to sell around 1m hybrid cars a year from 2010—a huge jump if you consider that it has sold 2m hybrids in total since 1997. With several kilograms of rare earth metals in each hybrid car, Toyota, Honda and other car-makers will have to stock up to avoid bottlenecks.
The problem is that there is only one seller: China, with 95 per cent of the world’s supply. Not only does China dominate the production of rare earths, it also leads the field in extraction. That means, for example, that when Japan buys rare earth minerals from countries other than China, it still has to pay Chinese factories to extract the pure metal. All of this wouldn’t be an issue if China was keen to sell. But, increasingly, it isn’t. Beijing has cut export quotas steadily, from 48,500 tonnes in 2004 to 31,310 tonnes in 2009. And in August, China proposed capping rare earth exports at 35,000 tonnes for each of the next six years; barely enough to satisfy the current Japanese market, let alone the world. Even worse for companies like Toyota, China is planning to entirely phase out some forms of dysprosium, a vital component…