China : Raring to rarefy the rare earths?

To start with, What are Rare Earths?

IUPAC defines the rare earth elements as a collection of seventeen chemical elements in the periodic table, namely scandium, yttrium, and the fifteen lanthanides. Scandium and yttrium are considered rare earth elements since they tend to occur in the same ore deposits as the lanthanides and exhibit similar chemical properties.

Their name might suggest that they are rare but, on the contrary, they are plentiful in the earth's crust. But, the only problem is, the minerals from which they can be extracted in economical ways happen to be available scarcely. A few of their uses are listed below.




These rare earths are often found together. Some of them exist in negligible quantities quantities in the entire earth's crust. For example, Promethium has a short half life of 20 years and so exists in negligible amounts, approximately 572 grams, in the entire earth's crusts. There are currently approximately 100 million metric tons of proven rare earth reserves all around the globe. The production for the last year, that is 2009, is 124,000 tonnes accounting to a trade of approximately $2 billion.

All this is fine. What does it have to do with China?

“There is oil in the Middle East; there is rare earth in China,” declared Deng Xiaoping, the architect of China’s economic transformation, in 1992. Of the total rare earth reserves, China holds about 36% of the total reserves which in itself is nothing great to talk about. US also has about 13 million ton reserves which should be enough for its sustenance.

But, when it comes to production, China rules the scenario. The relative abundance, combined with low extraction and processing costs , reflecting both low wages and weak environmental standards, allowed China’s producers to undercut the U.S. industry. The result was a monopoly position. China produces about 97% of the rare earths crucial to the manufacture of high-tech products from video cameras to wind turbines. China knows others can’t catch up quickly: by its own admission, the US could take up to 15 years to build a domestic rare-earth supply chain, and for now, there are no effective substitutes for defense systems.

However, it's very important to note that it produces these amounts at a big risk to its environmental conditions. Mining and processing of rare-earths is supposed to generate huge amounts of radiation pollution around the areas.

I heard it's been the same from 10 years. What is the problem now?

All was well until China started to show its willingness to exploit this monopoly to its fullest. Firstly, China announced plans to reduce its export quota to 35,000 million tons, ostensibly to conserve scarce resources and protect the environment. This would force the many high-tech companies establish their manufacturing units inside China owing to the low availability of these materials outside the country, thereby giving an unfair advantage to not only the Chinese manufacturing companies but also to the raw material industry inside the country. The curbs could also boost Chinese revenues by propping up prices that plunged due to weak demand amid the global financial crisis.

Then came the Chinese trawler incident. In August, a Chinese trawler operating in Japanese-controlled waters collided with two vessels of Japan’s Coast Guard. Japan detained the trawler’s captain; China responded by cutting off Japan’s access to crucial raw materials. And there was no one else to turn to. Japan soon let the captain go. This story alarmed the entire world regarding Chinese monopoly and its ability and willingness to wage an economic warfare at the slightest provocation.

That sounds dangerous.. Can no one control China if need be?

China dominates current production of rare earths but in no way has a dominant supply/reserve position. Though it lacks in oil and sanctions can be imposed on the resource, amid a regional skirmish, there seems little harm to China in issuing a global reminder of its utter dominance in some very 21st-century products.

The 2 alternative solutions to Chinese monopoly were to: start facilities to process the raw materials which will take time and resources and is being pursued now, another prominent alternative being urban mining, recycling of rare earths and other materials from used electronic devices.

The only positive outcome of the entire scenario is that the concern over China's monopoly may prove to be a big boon for electronics recycling. Until now, much of that recycling has been done under dangerous conditions in developing countries.

{Delay in publishing this post owed to the constant disruption from my service provider : Beam Telecom }

Celebrating everything,

Aravind M
http://www.aravind90.blogspot.com