Supply and Demand (2)

For the last thirty years and more, the major world shortage has been energy. This has been leveraged into a political and military weapon that has changed the face of the world. There is even a faint (or not so faint) suspicion that the war(s) in Iraq might have been for this reason. Now we have a new material that appears to be one of the next generation shortages. Anybody ever hear of Rare Earth Metals? Until recently I had never heard of this group of metals, so I investigated and the first thing that caught my eye was a quote....

Late-former leader Deng Xiaoping once said: "The Middle East has oil, China has rare earths".

 A significant article from the Australian Business edition of the Wall Street Journal. While the West wrestles with its debts and deficits. China systematically builds it power. China thinks in a different time frame -- like decades, not years.

 

1.CHINA has triumphed in a 15-year quest to become the "ultimate monopolist" in the supply of rare earth metals - a dominance that industry experts say could give Beijing control over the future of consumer electronics and green technology.

 

2.Industry sources believe that with China dramatically cutting its annual rare earth export quotas, the time may be rapidly approaching when it will be impossible for any company to produce a wind turbine or hybrid electric car outside the communist country.
After a long, relentless campaign of price wars and export quota reductions, more than 95 per cent of the global supply of rare earth metals - a group of 17 "lanthanide" elements employed in hundreds of technologies ranging from mobile phones and BlackBerrys to lasers and aviation - is produced by China.

3.Although China has the resources and refinery capacity to produce enough lanthanum, terbium, neodymium and dysprosium to satisfy a global demand that is rising at 10% per year, its rare earth export allocation for the whole world this year is expected to be about 38,000 tonnes - less than the quantity required by Japan alone.

4.China's rising strength in rare earth supply and its apparent willingness to use that as "a 21st-century economic weapon" have triggered what government sources in Tokyo told The Times was an invisible tsunami of panic in Japanese industry, which in turn has called on the Government to fight its corner with Beijing. Japan, which imports nearly 100 per cent of its rare earths from China, sees the group of elements as a probable battleground for future trade wars.

5.Toyota and other big carmakers are hurrying to secure alternative supplies in Vietnam and Malaysia. Mines in the United States that were forced out of business by price wars may be brought back into use. Yet many industry observers believe that Beijing may engineer a global supply crunch before any serious rival sources become available.


COMMENT:While the US is spending $trillions in an effort to thwart the primary bear trend, China is systematically buying up the world's resources from oil to farm land to rare-earth metals to gold.

GOODBYE OIL and HELLO RARE EARTH METALS 

To be continued.....