World's Biggest Supplier of Rare Earths Stops Production for a Month
Rare Earth Element Oxides.
U.S. Army tanks and Apple's iPhones represent just a few of many technologies that need a special class of elements called rare earth minerals. But the U.S. and the rest of the world currently depend on Chinese suppliers for most of their processed minerals - a scenario that leaves them helpless when China's biggest rare earths supplier cuts production to boost prices.
The Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-Tech controls about 60 percent of China's rare earth production, according to AP news. That means Baotou Steel's decision to suspend production for a month will have a huge impact on the world's supply, given how China supplies 97 percent of the world's rare earth minerals.
Rare earth minerals of both "light" and "heavy" varieties exist in everyday gadgets that include TV displays and cell phones. Green technologies, such as hybrid electric cars and wind turbines, also use rare earth magnets.
The U.S. military's supply chain also requires rare earths: lasers, radar, missile-guidance systems, satellites and aircraft electronics represent just a few examples. Specific examples include the navigation system for the Army's M1A2 Abrams battle tank and a hybrid electric drive under development for the Navy's DDG-51 destroyers.
Perhaps the highest use of rare earth minerals exists in metal-working that uses the minerals as chemicals to remove impurities found in iron and steel. The second-highest use comes from computers that require rare earth magnets to help stabilize their spinning computer hard drives.China has already begun cutting back on exports of rare earth minerals to feed its own growing domestic demand not an unreasonable move for any country.
But the Baotou Steel decision to temporarily suspend production seems aimed more at short-term market profits. That could backfire if it spurs other countries to redouble efforts in building their own rare earth industries.
Many countries have begun opening their own rare earth mines or searching for alternative sources, but China still has the only industrial facilities capable of processing rare earth minerals. The U.S. may need at least 15 years to build its own equivalent supply chain, according to a 2010 report by the U.S. Government Accountability Office.
The U.S. need not simply grit its teeth as a helpless buyer. The Department of Energy has already begun supporting efforts to find substitute materials for rare earth minerals. Recycling of rare earth minerals could also slightly ease dependence in the short term until the world moves on beyond its rare earth minerals shortage.