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High-Tech Companies Face Shortages as China Hoards Metals
Germany is pinning its economic hopes on future-oriented industries such as solar panel manufacturing. But high-tech companies are facing shortages of essential metals as China, which dominates the world market in so-called rare earths, begins stockpiling the highly sought-after resources.
It's a situation that has been the source of many a headache for Ulrich Grillo. Grillo runs a zinc and sulfur processing company in the western German city of Duisburg, and he also heads the commodities policy committee at the Federation of German Industries (BDI). He notes with growing concern how German companies are becoming increasingly dependent on Chinese sources of raw materials, putting themselves literally at the mercy of the Chinese. What happens, Grillo asks, if China decides to block access?
There are certainly signs that this could be happening. The People's Republic no longer wants to sell off its rare commodities at rock-bottom prices, as it once did. Indeed, government planners have imposed restrictions on exports recently. This could seriously jeopardize German industrial growth, says Grillo. "We are headed for a commodities gap," he warns.
Even as it stockpiles its own mineral resources, China is systematically securing its access to other resources around the world, including investments in iron mines in Australia and cobalt reserves in Congo. At the same time, China is filling up its warehouses. Its zinc inventories have more than doubled since March, while its lead supplies have grown by close to 600 percent. With more than $2 trillion in foreign currency reserves, Beijing has more than enough money to fill up its stockpiles. In some cases, it even pays for resources with weapons.
Originally posted by Sir Solomon
reply to post by Edrick
Yeah, I have to agree with you. Even though a lot of the geopolitical books and articles I've been reading state that China likely won't be a superpower in the 21st Century, I'm thinking more and more that they're wrong. This just adds another piece of evidence to my theory.
LOL, spend a few billion to bring back 20 million worth of minerals from some part of the solar system.
Concern as China clamps down on rare earth exports
Neodymium is one of 17 metals crucial to green technology. There’s only one snag – China produces 97% of the world’s supply. And they’re not selling...
Britain and other Western countries risk running out of supplies of certain highly sought-after rare metals that are vital to a host of green technologies, amid growing evidence that China, which has a monopoly on global production, is set to choke off exports of valuable compounds.
Failure to secure alternative long-term sources of rare earth elements (REEs) would affect the manufacturing and development of low-carbon technology, which relies on the unique properties of the 17 metals to mass-produce eco-friendly innovations such as wind turbines and low-energy lightbulbs.
China, whose mines account for 97 per cent of global supplies, is trying to ensure that all raw REE materials are processed within its borders. During the past seven years it has reduced by 40 per cent the amount of rare earths available for export.
Industry sources have told The Independent that China could halt shipments of at least two metals as early as next year, and that by 2012 it is likely to be producing only enough REE ore to satisfy its own booming domestic demand, creating a potential crisis as Western countries rush to find alternative supplies, and companies open new mines in locations from South Africa to Greenland to satisfy international demand.
China Said to Widen Its Embargo of Minerals
China, which has been blocking shipments of crucial minerals to Japan for the last month, has now quietly halted some shipments of those materials to the United States and Europe, three industry officials said this week.
The Chinese action, involving rare earth minerals that are crucial to manufacturing many advanced products, seems certain to further intensify already rising trade and currency tensions with the West. Until recently, China typically sought quick and quiet accommodations on trade issues. But the interruption in rare earth supplies is the latest sign from Beijing that Chinese leaders are willing to use their growing economic muscle.
“The embargo is expanding” beyond Japan, said one of the three rare earth industry officials, all of whom insisted on anonymity for fear of business retaliation by Chinese authorities.
China mines 95 percent of the world’s rare earth elements, which have broad commercial and military applications, and are vital to the manufacture of products as diverse as cellphones, large wind turbines and guided missiles.