Gadget Makers Feel Pinch of Soaring Rare Earth Prices
Your new smartphone or laptop may not jump in price just yet, but the manufacturers have seen soaring prices for the rare earth minerals used in such gadgets.
Rising demand for the minerals has outpaced supply and led to a doubling in price over the past four months, according to the New York Times. The dominant supplier, China, has also begun cutting back on rare earth exports to the rest of the world and raising export taxes as it focuses on feeding its own industry demands.
Such price increases probably won't hit consumers, because gadgets such as iPhones or computers use tiny amounts of rare earth minerals. But experts have warned that the high prices and short supply could slow the pace of innovation in developing new technologies that use such minerals.
One consumer product that may also see related price increases is Toyota's Prius hybrid electric car, which uses 2.2 pounds of the magnetic material known as neodymium. But consumer demand, economic conditions and production issues in the wake of Japan's earthquake and tsunami have played the big roles in recent Prius price hikes, the New York Times reports.
The doubling in rare earth prices over the past four months comes on top of a fourfold price increase in 2010 – and the pressure won't lift anytime soon. Rare earth mining companies in the U.S. and elsewhere have begun reopening old mines and investigating new deposits, but many new mines around the world won't start up until 2014.
Recycling the minerals in old gadgets may help meet some of the demand, but the process remains both complicated and expensive. Huge corporations such as General Electric and Toyota have also begun looking for substitutes that could replace rare earth minerals.
For now, China controls 97 percent of current rare earth production because it alone has the expensive facilities needed to process the minerals. The country used that position as political leverage by halting rare earth mineral shipments to Japan during a territorial dispute last fall, the New York Times said.
This article was provided by InnovationNewsDaily, a sister site of TechNewsDaily.