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War & MP3s: Rare Earth Elements

Today’s post comes from Imogen Reed, freelance writer and wannabe rockstar.

China is at risk of sparking a trade war over unsanctioned restrictions of exports of a number of rare metals. These materials, commonly known as rare earth elements, are used in the manufacture of myriad different products including iPods, iPhones, plasma TVs, night vision goggles, Blackberries and hybrid car batteries. In addition, they are also required for the production of military equipment such as laser-guided smart bombs and heat shielding.

Back Story

The first indication of China starting to hold back on its obligations was in September 2010 when the uneasy sense of antagonism existing between China and Japan was flared up once again by a boat collision around the disputed territories of the Senkaku Islands and the subsequent detention of a Chinese fishing trawler captain by the Japanese coast guard.

China’s ban on the export of rare earth metals to Japan may or may not have been a direct reaction to this incident, but the timing was too coincidental to not look suspicious. Of course, China denied that such a restriction had been implemented, but then the Chinese government does expect its citizens to accept official statements as indisputable facts and presumes the rest of the world will follow that same logic.

Mining Monopoly

It’s now apparent that China’s export quotas and the duties that must be paid on them are designed to give an advantage to its domestic industry over international competition, which is a violation of international trade rules. Countries in the West are forced to pay excessive amounts for a supply of the minerals that barely meets demand.

Although deposits of the metals also exist elsewhere in the world, the deposits are often tainted by radioactive metals formed under similar conditions. China, never being a nation to let danger to human life stand in the way of industrial progress, began large scale mining in earth mineral-rich areas in the early 2000s, thus cornering the market on their refinement.

The Obama administration has now lodged a joint formal complaint with the World Trade Organization along with Japan and the European Union.  The responding statement from China’s Ministry of Commerce declared it has “no intention of protecting domestic industries by distorting its foreign trade.” But of course, nobody was really holding out for an admission of guilt.

Periodical Importance

The more technical name for rare earth elements are lanthanide metals. This series of elements are one of the two rows on the periodic table that break out of the transitional metal block. They’re the ones you always ignored in chemistry class because they were never mentioned and didn’t seem to fit in with anything. The two elements above in the block, scandium and yttrium, are also classed as rare earth metals due to the close similarities in properties.

Compounds of the elements are phosphorescent, meaning they give off colored luminescence, making them perfect for compiling the pictures in TV screens. Their magnetic properties, combined with relatively light weight, also make them ideal for computer disc drives and electronic devices like iPods and mobile phones.

Fallout

If the restrictions of rare earth metal exports remain unchecked. It will doubtlessly have knock-on effects for the cost of any shipments that make it through. Certainly, nobody is going to cry a river for Apple executives forced to shell out over the odds for the raw materials required for their designer products, as they have enough money for all the big houses, expensive cars and Mediterranean cruise deals their steam-pressed hearts desire. However, it’s more than likely that the increased expenditure will be passed on to the people wanting to adorn their lives with sleek shininess, meaning the retail prices of the goods could skyrocket without warning, possibly pricing the items out of the reach of ordinary consumers.

A further issue is that due to the use of the metals in military hardware, they can be classified as a strategic resource, like oil was in the 1910s and ‘20s, and uranium in the ‘40s and ‘50s. In doing so, the government can invoke the Defense Production Act, meaning that all imported quotas of rare earth metals can be prioritized for the requirements of national defense. Subsequently, any leftovers will end up scarce and pricey, so it follows that any items made using them will end up even more prohibitively expensive.

If for some reason you don’t already own an iPod, you might want to look into getting one fairly quick. Who knows how much longer you’ll be able to afford it?

Interested in more? Here’s an article from treehugger.com on the subject.

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