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China's near-monopoly of rare earth metals gives it worrying amounts of power, writes Geoffrey Lean.
The land of unobtanium: the Bayan Obo mine in Inner Mongolia produces three quarters of China's rare earth output Photo: REX FEATURES
Though the 17 rare earth metals are little known, modern life would not be possible without them: everyone uses them many times a day.
China has about a third of the world's rare earth reserves – mainly in Inner Mongolia – with the rest widely scattered around the earth. So the emerging superpower has used judgment, as much as geological luck, to achieve its dominance in the field.
"The Middle East has oil, and China has rare earths," said Deng Xiaoping, founder of the country's modern economy, back in 1992. Seven years later, the then president, Jiang Zemin, swore to achieve "economic superiority" in the industry. And his country has done just that.
Partly, this is because the rest of the world largely ceded the field. The United States, which has the second largest known deposits, once dominated production. But it closed down its industry – largely because of low-cost Chinese competition. A factory in Indiana, which once made four out of every five of the rare-earth magnets on US smart bombs, now houses Coco's Canine Cabana, a daycare centre for dogs.
"The Pentagon has been incredibly negligent," says Peter Leitner, a former top US official. Indeed, China's policies – and its own demand for the materials – is beginning to turn rare earths into the real-life equivalents of the fictional substance "unobtanium", so sought after by the corporate villains in the film Avatar.
Over the past decade, China has cut its rare earth exports by about half, and it has just slashed them by a further 72 per cent. Within a few years, experts predict, it will need its entire supply to satisfy domestic demand. More at:
http://www.telegraph.co.uk/earth/earthcomment/geoffrey-lean/8037950/Rare-earths-just-got-a-lot-rarer.html
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