FYSA: China makes its Move Strategic Medals
My Comment: In the big game of Chess being played, the announcement of "Check" could be heard from across the Pacific. Read, heed and possibly make a Plan B.
George Washington Blogspot breaks the story:
China Deploys Rare Earth Metals For Strategic Leverage
As I've previously noted, China has cornered well over 90% of the market for rare earth metals, which are essential in various high-tech products.
The Telegraph ran an article on August 24th pointing out that China is now deploying these resources to gain strategic advantage:
Beijing is drawing up plans to prohibit or restrict exports of rare earth metals that are produced only in China and play a vital role in cutting edge technology, from hybrid cars and catalytic converters, to superconductors, and precision-guided weapons.
A draft report by China’s Ministry of Industry and Information Technology has called for a total ban on foreign shipments of terbium, dysprosium, yttrium, thulium, and lutetium. Other metals such as neodymium, europium, cerium, and lanthanum will be restricted to a combined export quota of 35,000 tonnes a year, far below global needs.
China mines over 95pc of the world’s rare earth minerals, mostly in Inner Mongolia [My note: Mongolia is not part of China, but is an independent nation]. The move to hoard reserves is the clearest sign to date that the global struggle for diminishing resources is shifting into a new phase. Countries may find it hard to obtain key materials at any price...
No replacement has been found for neodymium that enhances the power of magnets at high heat and is crucial for hard-disk drives, wind turbines, and the electric motors of hybrid cars. Each Toyota Prius uses 25 pounds of rare earth elements. Cerium and lanthanum are used in catalytic converters for diesel engines. Europium is used in lasers.
Blackberries, iPods, mobile phones, plasma TVs, navigation systems, and air defence missiles all use a sprinkling of rare earth metals. They are used to filter viruses and bacteria from water, and cleaning up Sarin gas and VX nerve agents...
New uses are emerging all the time, and some promise quantum leaps in efficiency. The Tokyo Institute of Technology has made a breakthrough in superconductivity using rare earth metals that lower the friction on power lines and could slash electricity leakage.
The Telegraph points out that Japan is also taking steps to secure a supply of rare earths, but the West has not:
The Japanese government has drawn up a “Strategy for Ensuring Stable Supplies of Rare Metals”. It calls for 'stockpiling' and plans for “securing overseas resources’. The West has yet to stir.
The Telegraph also notes that China is not necessarily using its near-monopoly of rare earths to dominate the world, and that other countries may be able to extract more rare earths after slowly ramping up production:
Alistair Stephens, from Australia’s rare metals group Arafura, said ... “This isn’t about the China holding the world to ransom. They are saying we need these resources to develop our own economy and achieve energy efficiency, so go find your own supplies”...
It will take years for fresh supply to come on stream from deposits in Australia, North America, and South Africa.
The bottom line is that the West has been asleep while China has amassed tremendous control over scarce resources which are vital for both technological innovation and security. China's deployment of its dollar reserve holdings (which may lose value) to purchase these key strategic assets is very clever, indeed.